Courtesy of Jeremy Gaudreau:

The last month and a half have been a tough time for home sales around the nation, but the Richmond Market is still stable. The Southside’s Market Absorption Rate increased from a previous 1.93 month level in April to 4.4 by mid-June. The problem hasn’t been with a decrease in buyers, but an increase in inventory. April saw 87 properties put on the market, and the number jumped to 123 in May. As of the middle of June we have already seen 86 properties listed. This is common in a spring market, but usually the amount of buyers increases also. However with the recent sub-prime fallout and a dramatic rise in the amount of foreclosures, many First-Time homebuyers have been hesitant to purchase that new home. These numbers still look good for the Southside area as the Greater Richmond area is seeing an increase from 2.13 to 5.54 months of inventory.

Stepping back and looking at the nation as a whole, a blockbuster New Home Sales report was released May 24 reporting a showing of 981,000 for April, which was much stronger than expectations of 860,000. And the monthly inventory plummeted to 6.5 months for April from March\’s reading of 8.1 months. This report was very strong and suggests that the Housing market continues to improve from its worst levels. The talking heads in the media were choking on the report.

New Home Sales for April were rocking, but it was not the same for Existing Home Sales. April reported at 5.99 Million units, which was below expectations of 6.13 Million. This slower pace of sales lifted the inventory of unsold existing homes to an 8.4 Month level, which was a sizable jump from last month’s reading of 7.3 Months. Lawrence Yun, National Association of Realtor’s Senior Economist, had this to say about the report “We’ve been anticipating slower home sales because many sub-prime loan products are no longer available. In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community. Fortunately, there is still a wide variety and availability of conventional mortgage products and don’t forget the 4.5 million jobs that have been created over the past 24 months. These both will help to stabilize the market going forward.”