Springfield Real Estate News
The first time home buyer tax credit powered sales of homes in the Greater Springfield area in September as sales rose a larger than expected 10.74% compared to the same month last year. Unfortunately, since first time buyers tend to buy cheaper homes, the average selling price and median selling price for September both edged down, falling 9.21% and 6.38% respectively compared to September, 2008.
Sales of homes priced under $100,000 really drove the numbers and continue to outperform homes priced over $100,000. 238 homes priced under $100,000 sold in September compared to 197 homes in September, 2008, a whopping 20.81% increase. Sales of homes priced from $100,001 to $200,000 were strong as well rising to 262 units in September from 240 units in September, 2008, a 9.17% increase. Sales of homes priced from $200,001 to $300,000 rose 8% to 54 units from 50 units last year. Unfortunately the good news did not extend to the upper end of the market as sales of homes priced from $300,001 and higher fell 48% to just 13 homes, down from 25 homes in September, 2008. With almost 650 homes on the market in the $300,000+ price range it would take over four years to sell everything on the market even if no new homes came on the market during that time.
Regarding prices, the median sales price (half of homes sold for more, half for less) fell 6.38% in September to $110,000 after falling 10% in August. The average selling price fell 9.21% to $123,446 after falling 8.38% in August. That puts the average selling price down 24.24% from the market high of $162,946 set in January, 2007.
Probably the most promising data in September was the strength in sales of homes in the $200,001 to $300,000 range. While the raw numbers were still low (54 total sales) the fact that an increase occured at all is new. The original intent of the first time home buyer tax credit was that as first time buyers bought homes, the sellers of those homes would then be able to move up and buy homes in the higher ranges, creating a domino effect.
Unfortunately, that’s not what has happened. Most first time buyers have bought foreclosure and distressed “short sale” properties where there is no “move up” seller present. The sellers are primarily banks or individuals who can no longer afford a home and upon selling move into rental units. This means the hoped for domino effect doesn’t materialzie and leaves the sellers of higher priced homes in the lurch with no prospective buyers. With the rise in sales of homes between $200,000 and $300,000 in September perhaps the domino effect may have started. The increase marks the first time in several years where sales in this price category have risen and may have been due to the strength in the lower end of the market. The sheer number of sales in the lower price ranges may have overwhelmed the supply of attractive foreclosure properties. Many lower priced foreclosures are in poorer condition and are not good choices for first time buyers. Additionally, “short sale” properties (where the seller agrees to sell for less than what is owed on the home) are becoming less favorable to first time buyers. It can take three to six times longer to close on a short sale (90 to 180 days) than a traditional sale (30-45 days). Anyone wanting to beat the November 30th deadline for the $8000 tax credit should not be trying to buy a short sale property. They simply won’t make the deadline. This leaves traditional sellers with nice, well maintained homes with less competition.
Obviously, one month does not a trend make and there are reasons to believe that even if the $8000 tax credit is extended, the sales increses won’t continue. Additionally, given the 48% fall in the over $300,000 price range it’s obvious we aren’t out of the woods yet.
Other Real Estate News
Find even more homes for sale