September is a transition time for almost everybody.
Here inEvansville, the kids have shifted into school gear, adults have moved out
of vacation mode, and businesses are already sprucing up for the (believe it or
not) Holiday Season.
Inreal estate, we are looking with more than casual
interest at what’s going on nationally. Especially those measures that tend to
affect Evansville home sales. The largest professional association in the
country is our own National Association of Realtors®. At the
beginning of the month, they broke another
piece of welcome news. This one looks like the difference between ‘indicators’
of a strengthening home sales market -- and signs that it’s already
fact.
The NAR release was about TOM. No, as you have probably
guessed, TOM isn’t some real estate broker’s name -- it’s the Time On
Market measure. For Evansville homeowners who are selling (or planning to
sell) their properties, it’s a vital measurement of one of the two most
important characteristics of how things are going – a tip to what they may
expect when they list. Along with median price trends, it tells the story of
whether the market is hot, cool, or somewhere in between.
For some years now, TOM has been an
uncooperative sort of fellow. At least when it came to Evansville home sales.
Following the financial crisis came skyrocketing foreclosures…then the fallout
from that -- painfully long TOMs marking the lengthening time it took to move
homes through the market. TOM had stretched out to a painfully long median of 98
days – close to the longest ever.
The good news: TOM is just about back to
normal. From the cyclical peak hit in 2009, by mid-summer, he was back “in the
range of historic norms for a balanced market.” Traditional sellers were
reporting the median TOM had returned to the balanced range of six to seven
weeks. IOW, TOM is finally behaving himself.
And what about that other half of the
picture that helps guide home sales expectations?
I think it’s too soon to tell for sure, but the head
economist at NAR knows what history tells us to expect when this kind of
balanced market returns. According to him (Lawrence Yun), “Our current forecast
is for the median existing home price to rise 4.5% to 5% this year.” Plus
another 5% in 2013!
So the transition that September means for
everyone else seems to be underway in the real estate world: and it’s a
transition back to home sales normalcy. In light of what we were looking at a
just couple of years ago, I think it’s fair to say we are delighted that
‘normal’ is the ‘new normal!’
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