The number of single family sales continues to be brisk; through the end of March, there were 251 sales per month in Westchester County, on average, versus 142 at the same point http://www.jeremyzucker.com/last year. The median and average selling prices were up more than 11%. In a sign that sellers recognize current market conditions, the discount from the asking price decreased, i.e., given more reasonable asking prices, buyers are paying closer to the ask than last year. On another positive note, days on market (a measure of how long it takes to sell) declined. Therefore, sellers who price their properties to sell are finding success. However, in a sign that not all sellers are realistic, expired listings jumped by 11%.

One of the big questions on people’s minds is: “Are prices going to fall further?” I believe that prices will soften in most areas, but not by much. Referring to the chart above, average single family selling prices are down about 18.5% from the peak; I doubt we will see an additional double-digit decline. So how does that affect a purchase decision? Since financing costs typically rise as the economy recovers, if interest rates rise by 1% and prices fall by an additional 10%, the monthly payment on a 30 year fixed mortgage would actually increase (see below). What happens, though, if/when interest rates approach the average rate over the past 20 years (7.21%).....?

Sales activity is up nicely at all price points, as shown below.

Months’ supply of inventory is at the lowest point in more than two years. Is this an effect of the soon-to-expire federal tax credit or pent up demand? The next few months will be interesting….