New national numbers were released by the National Association of Realtors® yesterday.  Overall, sales (sales closed in May) were up, but not as much as had been expected.  Lawrence Yun, NAR's chief economist noted that many sales written in earlier months failed to close because of poor appraisals.  Lending institutions often have been sending in appraisers who were unfamiliar with areas, even entire towns, and properties failed to appraise and consequently failed to close. 

This has always been a problem, especially when appraisers ignore information having do to with distressed properties.  A property sold in foreclosure is not a valid comparative sale, since it is not between a "willing buyer and willing seller."  Using such properties drives all values down.  As values decline, the potential is for additional properties to fall into foreclosure - a downward spiral, not unlike Detroit over the past ten years.

In the Northeast region sales were up 3.9% over April, but still down 10.1% over a year ago, and prices were down 12.5% over a year ago.  Somerset County New Jersey sales were off 17% over a year ago, but up 12.6% over April.  Remember, all real estate markets are local, so make your real estate buying and selling decisions based on local, not the mythical national numbers.

Although the Hillsborough real estate market trends for May (written about yesterday here) show steady activity at a relatively low level compared to last year, there is more to be learned from the price distribution of activity. 

First of all, there are 260 active listings on this date.  They are broken down as follows:

     Less than $300,000 - 95  (1 new construction)       37% of total actives

            $300-500,000 - 55                                       21%

            $500-750,000 - 58  (17 new construction)      22%

          $750-1,000,000 - 42  (22 new constuction)       16%

                $1,000,000+ - 10  (1 new construction)         4%

The average list price is $449,900, median $514,989.

If we look at the pending properties (homes that are under contract, but not closed yet), we see an interesting anomaly.  The bottom price range, the entry-level if you will, has just three more pendings than the next range, which has 40 more listings.  The lowest price range has a pending/active ratio of 23%, the "low middle" 31%.  The total for all ranges is 22%.

In other words, relatively speaking, the most activity right now in the Hillsborough market is in the $300,000-500,000 price range.  This has been the rule now since late March.  It could be suggested that the much larger number of actives in the low range indicates a desire by owners to move up or out.  Unfortunately, given the current economic conditions and the general level of real estate activity among first-time homebuyers, there are many more sellers than buyers at this level.

There is considerable pent-up demand.  Once the first-time homebuyers come back in large numbers, that inventory of under $300,000 homes will quickly vanish, as well the very attractive prices currently available.