April showers didn't stop home buyers from getting out and making offers. The activity was as brisk as the temperatures. I expect in July we will see that May and June were aggressive closing months. What happened in April has everything to do with people grasping reality instead of straws.
First time home buyers are reaping the benefits of resisting the 2010 tax temptation...I mean break. Instead of competing with other government subsidized consumers for over priced homes, those who waited have accepted offers on homes priced up to 40% below what they would have paid last spring. Owners are conceding to the facts of the market and letting go of hope for prices that can't be substantiated. Foreclosed homes are trickling on to the market in ones and twos at unusually low prices and the banks are creating competition which otherwise wouldn't exist with a strategy worth noting. In one neighborhood of homes built in 2004 and '05, one home came on the market at $183,000 and sold to the best offer at $200,000; a great price for a 4 bedroom 6 year old home. As soon as that one closed, the bank released another that had sold new for $220,000. The asking price of $174,000 drew at least six offers. I'm guessing that one will close around $195,000--I'll be curious to see.
In the higher price points owners are seeing plenty of qualified buyers coming to town. If we didn't know better we'd think the relocating buyers meet at the Dane County Airport and plan their strategy. Even multiple offers aren't driving prices to the upper limits and owners are placing value on such novel ideas as cash and terms and closing dates.
A healthy market means the local buyer isn't at a big disadvantage to the transferee and they have a chance to negotiate an offer without promising to take a bridge loan until their home sells. Offers subject to sale aren't as taboo today; in fact if you look at in a fishing analogy, an offer on your house subject to sale of another house is like having two lines in the water--if you get a fish on either line you have a chance to catch the one more you need for a limit.
Last spring the activity was 60% below $250,000. This year we'll see the market represented in a more healthy way with sales from top to bottom. April sales might still pale, but nothing is ever either just good or bad. How about we look at things as healthy or unhealthy? The health of the consumer continues to grow as everyone gains insight---knowledge of what is reality.
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