David Benda writes an informative article today in our local newspaper about local home sales in June this year. Home sales are up, as reported here a few posts ago. But the distribution of sales is distinctly low end, as the bulk of all local home sales takes place under $150K. See the chart below:In fact, our experience has been that there is an apparent lack of inventory in the low end, and there are multiple offers on nearly every home in that range. Above the $200K price range, sales begin to drop off.
Interestingly, we’ve had a couple of folks tell us “home prices are going to drop another 20%.” And yet while prices are still in decline here at about 1% per month or so, demand is up. Isn’t pricing driven by demand in the marketplace? Well, maybe those folks are right and prices will continue to decline. Our crystal ball remains cloudy. But we’re not making this stuff up about seeing multiple offers on well priced homes. And not being able to find enough candidate housing for our buyers from among the shrinking pool of homes for sale. The reality of scarcity, and the perception of market price freefall are at odds, but perhaps both are right.