Real estate market shows sign of perking up, both nationally and in Rochester,NY

The past week brought some good news on the national level, for a change! The National Association of REALTORS (NAR) reported that sales of existing homes across the nation rose 5.1 percent from January to February, and in the Northeast, sales were up 15.6%. While January is typically a slow month for sales, especially after a dismal Fall (driven by the stock market plunge and economic recession), these numbers were better than expected and were well received by the stock market. But over 40% of these sales were attributed to distressed sales such as foreclosures and short sales!

Nationally, housing inventory (homes listed for sale) grew 5.2%, according to NAR. It seems to me that foreclosures and financial distress must be driving homeowners to list their homes in some areas. In the meantime, low interest rates have sparked a boom in mortgage refinancing, which is good for the banks and credit markets.

NOW FOR THE GOOD NEWS! In this same time period, Rochester saw a 6.9% increase in purchase offers accepted, and a 3.5% increase in median home prices. The number of homes listed for sale dropped 10.8%. This tightening inventory of homes reflects the relatively small influence of foreclosures in our market compared to the national scene.

The Rochester, NY market is solid. I reported earlier that FORTUNE magazine had ranked Rochester 15th on the list of 25 Best Real Estate markets. Last week, MONEY magazine published a housing forecast that named Rochester third on the list for median price performance! MONEY says that Rochester's market will bottom out in the second quarter of this year, and will see median price appreciation of +0.7%. Only Syracuse (+1.0%) and Pittsburgh (+0.8%) rank higher. The survey states that Syracuse, Buffalo (+0.6%), Pittsburgh and Toledo (+0.5%) have already bottomed out, followed closely by Rochester, Greensboro, NC (+0.3%), and Birmingham, AL (+0.2%). THE REST OF THE COUNTRY WILL STILL SEE NEGATIVE PRICE APPRECIATION OVER THE NEXT TWELVE MONTHS, and some cities won't recover until 2010 and 2011!!

As I've said for the past year, national news and housing statistics do not reflect our market here in Rochester. We've certainly seen a decline in the number of houses sold, but the concurrent decline in inventory of houses for sale has kept the market fairly balanced, so median prices have only fallen a fraction. With the lowest interest rates ever, and the recently passed First-Time homebuyer tax credit, I expect to see activity pick up here in the spring selling season. I will personally be putting five listings on the market over the next ten days. If inventory stays low, we good get a surprise later in the year!