McAllen Residential Market Report

As with most of the country, real estate transaction volume in the McAllen Texas area has dropped. During the 4th quarter of 2008, sales decreased to 535 homes sold. Some of the factors contributing to the slowdown include the seasonality of real estate, the tightning of credit and buyer hesitation caused by media hype. Many files that were in process of closing were also delayed due to underwriters "overanalyzing" files.

During the 1st quarter of 2009, sales had a slight increase to 544 homes. But volume is down 15% compared to the same period last year.

In 2008, Foreclosures continue to gain market share as a significant component of the local real estate market. During the first quarter, REO / Foreclosure properties accounted for 47% of all closings. They only represent 11% of the inventory (233 of the 2,146 active residential listings) The turnover rate of REO listings is less than 3 months.

Banks are becoming more aggressive to move these foreclosures, which has dropped the average price of sold homes in this market. The banks are pricing their foreclosures so competitively that multiple offers will be presented, especially if the house meets FHA guidelines. The average sold price dropped 14% compared to the 4th qaurter of 2008 to $110,035.

On a positive note, the lending process is improving. As we enter the traditional selling season, many potential buyers are coming off the sidelines and are ready to take advatage of the bargains and claim an IRS tax credit for 1st time buyers.