Should You Be Impressed By The Home Sales Volume Increase Of 38 Percent?

In the state of California, the Multiple Listing Service median for a single-family home increased over a one-month period.  However, the year-over-year median for May fell a tremendous amount at 30.4 percent.  With that in mind, is there really any room to be excited about the increase of 38 percent?

What you need to look at first is some of the numbers.  For instance, the Palm Springs region has shown a 46 percent decrease from May of 2008 with housing selling at $152,860 versus the $283,480 in 2008.  While the sales prices drastically took a dive, the sales volume rose by 38.2 percent.

Similar to Palm Springs was the region of Victorville/Lancaster, which reported even lower median numbers with a 47 percent drop from May of 2008.  On the contrary, sales volume there increased as high as 96.2 percent.

People that could never afford to purchase a home are finally being able to find the right fit for them.  Affordability for first-time-home-buyers has never been as high as it is today.  Sales for existing single-family homes for the ninth consecutive month remained above the 500,000 level.

Ultimately, people are realizing they will never get an opportunity like this again.  Incredibly low home prices and favorable low mortgage rates accompanied by first-time home buyer credits have people flocking to the real estate market looking for the best deal available.

The housing market is just as affected by the economy as anything else.  While signs from the rest of the economy have continued to be quite gloomy, the housing market over the last few months has been actually fairly encouraging.  For once there seems to be a bit of price stabilization appearing.

So what are the positive changes that are becoming apparent of late?  Overall, the inventory levels are far lower than the long-run average of seven months.  This is one reason for the increase in median prices.  Another positive is that almost all regions in California are showing positive month-to-month changes in median price.

It is certainly discouraging to see numbers like a 46 percent decrease in sales prices in various locations.  However, it is encouraging to see sales volumes rise by as much as 96.2 percent in regions like Victorville/Lancaster.  For the time being, you are going to have to take the good with the bad while the economy continues to slowly improve.  It is only a matter of time until we will get back to enjoying the best of both worlds with sales volumes and sales prices.