Okay, so much for the good news.
The rate of annual sales still lags last year’s rate by 3.6%. The median price of a home dropped to $212,000, a reduction of 1.3% compared with a year earlier. In same-month comparisons with a year earlier, February marked the seventh straight price decline. As the sub-prime lending mess sorts itself out, stress sales will increase and add to housing inventory, which will have an indirect negative effect on prices at other levels of the market.
Of course, like politics, all real estate is local, and for every home that declines in price by 5%, there is another one somewhere that sold a little higher than expected. As we have warned at other times, if you are planning to relocate south soon after selling your house up north, don’t hold out for the last penny you think you can get. Chances are that property in Chapel Hill or Charleston is appreciating at a rate a few points greater than your northern home is appreciating (if your home is appreciating at all). Many of those who sold their homes last month may have realized this.
If you wait, the delta between your selling price and purchase price for what you want could very well widen beyond your ability to pay the difference. Of course, if you have had your eyes on a condo in Miami, Naples or the Phoenix area, waiting may not hurt as much since those markets continue to drop.
The old line about the stock market is instructive in real estate as well: “Bulls make money, bears make money but pigs get slaughtered.”