As we approach St. Patrick's Day, there's reason to take advantage of our Blarney Stone kisses and impart some eloquence (or "gift of gab" if you prefer). New listings continue to trail year-over-year numbers in our local housing market, coming in at 1,628 for the week ending February 28, which is 19.2 percent behind this week last year. Total active listings are roughly 5,000 below this time in 2008. In an oversupplied market, this is cause for celebration. Continued growth in home sales adds to the festive spirit, with pending sales showing a healthy 12.1 percent increase over the doldrumish numbers of last February.
There are several important monthly indicators to look at in this week's report. Days on Market Until Sale in February stood at 157 days, down 4.8 percent from last February. This is the third consecutive month of downward year-over-year movement. The Housing Affordability Index (HAI) continues its yearlong improvement with a March 2009 HAI of 206—31.2 percent ahead of its March 2008 mark of 157. Months Supply of Inventory is holding relatively steady at 7.8 months, down 15.2 percent from the mark of 9.2 months we saw a year ago.
According to John Tucillo, one of the foremost real estate economists in the U.S. and former Chief Economist for NAR, there are three necessary phases that must occur for the housing recovery to launch:
1) a decline in new listing activity
2) a decline in days on market
3) an increase in sale price to list price ratio
The first phase came about last summer and the second phase began in the fourth quarter of 2008. Hopefully the third phase will occur sometime this year. Strong affordability, improving chances for a housing recovery and a federal tax credit for first-time buyers equates to a welcome home-buying environment—a little Irish luck for real estate.
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