Tuesday, March 15, 2011

Doug's Spring Reflections

Ahhh…. March, the month spring arrives and boy, do we deserve a nice one! The winter of 2011, specifically the snows in the northeast, will be remembered for a long time.

I write to you this month from the International RE/MAX conference in Las Vegas Nevada. This 4 day annual event brings together over 5,000 REMAX agents from 56 countries to study current real estate trends, interact and share ideas and see the newest “gadgets” available. I had dinner last night with a group from India that opened the first RE/MAX offices in that country just 2 years ago. Their market is booming!

There is some good news and some not so good news at the first day of the conference. The good news is that many indicators (nationwide) are suggesting an upswing in the economy. With consumer purchases up at Christmas time (first in 4 years), an increase in car sales (big ticket purchases) and a decrease in unemployment (now below 8.9% nationwide, 8.1% in the northeast), economists are seeing a renewed consumer confidence. This confidence will surely translate into more real estate purchases. The not so good news is that the foreclosure mess that has affected so many communities will not end in the near future. There are an estimated 7,000,000 (yes, million) homes still facing foreclosure over the next 4 years and these properties will saturate the market, thus buffering prices and confusing buyers. In some markets, these bank foreclosures and short sales are 70% of the market. Luckily for us, these type of “distressed sales” on the Vineyard is only about 12-13% of the market.

Island sales for February were down to 23 for the month with an average price of $646,644 and a median price of $515,000. These are both down from the past 3 months. This is typical for this time of the year since closings usually take 60-90 days from initial offer and the November/December market is traditionally a slow time.

Interest rates have been fluctuating as high as 5.25% for a 30 year rate but recently dropped below 5%. I believe interest rates will stay steady throughout the year.

Here’s hoping for a wonderful spring and a busy selling season.