Where is There Movement in the Real Estate Market and Where is There Decline?

Lessons from the Pros

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Real Estate has always been about location, location, location.

According to Realtor.com, there are 8 cities that can boast to having the fewest days on market which translates into quick sales. Guess what, good old California is the fastest, even with all its dysfunction. California is the state with the highest number of cities "where homes tended to spend the shortest amount of time on the market last month," as reported by Realtor.com.

The California cities with the least amount of time on the market (also known as DOM ?days on market) before they are sold are as follows:

• Oakland ? 50 days on the market, with a median list price of $319,000

• San Francisco ? 63 days on the market, with a median list price of $639,000

• LA/Long Beach ? 70 days on the market, with a median list price of $345,000

• Stockton/Lodi ? 70 days on the market, with a median list price of $175,000

Here are some of the other top cities outside of California:

• Denver, CO ? 66 days on the market, with a median list price of $259,000

• Iowa City, Iowa ? 66 days on the market, with a median list price of $187,500

• Anchorage, AK ? 71 days on the market, with a median list price of $279,975

• Tulsa, Oklahoma ? 71 days on the market, with a median list price of $147,500

There were 146 markets reviewed for this report. According to Realtor.com, "Nationally the median days on market (DOM) was 160 which is an increase of 40 percent in a year."

For those who are selling outside of these top markets, the experience can be quite different. Some are feeling the pinch as homes sit on the market for long periods of time.

The areas where there has been a decline in sales lately isn't really that surprising.

The Midwest, as a whole, saw a large decline, falling 6.4 percent. This is 22.7 percent below last year. The region's median price is also down year over year and is now $136,400.

The South followed suit with sales down 5.1 percent. Median price also has fallen 3.1 percent to $149,200.

Once again, we are looking at a wide range of data with no clear upside for the whole industry. Lawrence Yun, NAR (National Association of Realtors) Chief Economist, feels that temporary factors are holding the market back. Mr. Yun said that "Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward. The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year."

At the writing of this article, Congress had just passed a bill that would allow the debt ceiling to be raised after months of bitter debate and a great deal of infighting. I personally feel that in the last couple of weeks, many Americans have been in a holding pattern until there was resolution on this issue. We'll see in the coming months if that did have a big impact.

Another interesting factor is homeownership rates (see chart below). Homeownership is the lowest nationwide since 1997.

So my question to you is: Is this a reflection of the economy (i.e. jobs and available money), or are Americans paralyzed and afraid to take any risk?

I'd love to hear your thoughts.

Source: http://www.fxstreet.com/education/related-markets/lessons-from-the-pros-real-estate/2011-08-09.html

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