In October of 2005, during the peak of the real estate boom, the median sales price of a home in America was 7.3 times per capita income. This May the median price of a home in American had settled in around 5.7 times per capita income, close to a 30% drop and right around historical average.
Since then, home inventories have flattened or dropped and in some markets we have seen prices beginning to steady and rise.
Adam York, and economc analyst for Wachovia says that “The indicators are starting to look better”
SmartMoney says the following markets are in for a rebound:
- Seattle
- Raleigh
- Des Moines
- Philadelphia
- Denver
- Birmingham, Alabama
- Salt Lake City
My Thoughts:
I use historical indicators as a top factor in my personal invesment decisions and also the advice we give our clients. To see that the median price has come back down to historical levels vs. per capita income, I think the bumpy ride we have been on for the past 12-18 months is going to start to smooth out a bit.
As for what is happening on the streets of Boston with our condo and home market, I can personally say that I’m starting to see units move that have been on the market for a while. While some price cuts have obviously driven this, the lack of inventory also makes what is left on the market more attractive. I currently have a half dozen active buyers I am working with and the only thing holding them back from moving forward is a complete lack of inventory.
