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T he other day I read “Existing home sales sank 27.2% in July, twice as much as analysts expected…”, who are these analysts? What are they analyzing? I looked at our local numbers after I read that and a few other articles last week and found that they are only telling you part of the story. See the problem is, reporters and the news industry in general are actually the entertainment industry in disguise and they sell news by using fear and scary statistics to get us all to buy their rag and read. Here are a few local statistics, and my layman’s explanation of them.
In Skagit County our sales (closed home sales) dropped 37% in July from June’s numbers; even worse than the National statistics I read on CNN.com. However what they don’t tell you is why. On April 30th the Homebuyers Tax Credit expired, creating a rush to buy in that month. Skagit County saw 160 homes go pending in April, and that represents 61.6% more than the average number of pendings over the past 12 months. April was HUGE in terms of pendings. Well, guess what happens 45-60 days after a home goes pending – it closes. This created a huge uptick in closings in June; to be exact we had 122 homes close which is 73% more than the 12 month average. What’s this mean? This means that July had no place to go but down in terms of closings. A 37% drop is to be expected, and isn’t a bad thing. In fact, July was up 23.9% in pendings from June – the buyers are still buying and the market is fine. July saw 109 homes go pending, our 12 month average is 99 homes in a month, so we are beating the average despite the entertainers/analysts headlines at CNN.com and other news outlets. Closings had to drop in July, that’s not news, that’s the ebb and flow of buyers and closings juiced up by the tax credit. There are still amazing deals to be found in Skagit County and elsewhere, that can be financed at amazing interest rates and it remains a buyers market. Look past the headlines when you see them, and remember that real estate is a long term investment, not a month to month stock.
