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Market Starts the year with momentum |
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The local housing market starts the year with a nice bit of momentum. Buyers in 2009 were attracted by moderating home prices and low mortgage rates, which combined to create some of the highest levels of affordability on record. After a tough start to the year, area housing sales finished 2009 on a strong note. Through the first half of 2009, home sales fell 18% compared to the same period a year earlier. The broader economic conditions, including a falling stock market and rising unemployment, rattled consumer confidence at that time. Throughout the year prices started to come back in line with our market’s historic levels of appreciation. After an 8% drop in 2009, Chart 1 shows average prices are nearly back to the level we’d expect. With the price reductions, buyers have jumped back into the market. In the second half of the year, home sales were up 10% over 2008 levels.
Buyers are looking for value, and they are acting quickly when they see it. Well-priced homes in all price ranges are selling at a record pace. Homes that did not require a price reduction were selling in an average of just 32 days (See Chart 2). That is nearly two weeks faster than during the seller’s market in 2006.
With many home prices back to sustainable levels, 2010 sets up to be a better year for the local housing market. The shock of the recession kept a lot of would-be home buyers on the sideline. Their reasons for moving hadn’t changed, but they put off buying. With consumer confidence on the rise after two consecutive quarters of positive GDP growth, people are shopping again. They are recognizing the opportunities that exist in this market. No doubt the biggest threat to a sustained recovery in our local market will be jobs. While employment is a lagging economic indicator, we’ll all keep a sharp eye on how the state deals with the budget deficit and what that means to local jobs. Even with that challenge, Thurston County’s unemployment rate is a couple of percentage points below the state’s rate and even further below the national rate. |
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EXPANDED HOME BUYER TAX CREDIT EXPIRES SOON
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