So...How's The Tyler Market?

The most recent numbers are out for July and the trend was largely as expected. In this post we'll explore the most recent numbers that drive the local Tyler/East Texas real estate market and provide our analysis of what that means.

Home Sales

July homes sales, according to local GTAR MLS data, were up about 9% from the same month last year.  However, July sales were about 11.2% less than June 2011 marking the first month in 2001 where sales fell from the previous month.  Compared to the same 12 month period a year ago, cumulative home sales through July 2011 were down slightly (-1.5%). Both June and July sales were trending higher than same month prior year sales.

Median Home Prices

Compared to the same 12 month period a year ago, median home prices remain virtually unchanged. Median home prices, while having some seasonal variability, have remained relatively steady and, since March, 4 of the 5 months have been trending slightly higher than the same month previous year.

Inventory

Available inventory for July was virtually unchanged from June - up about 0.2%. Compared to the same 12 month period a year ago, monthly inventory of available homes has increased. Over the last 3 months, current months inventory had been staying relatively unchanged compared to the same month previous year.

 Months of Inventory

The months of inventory (MOI) data indicates the time to sell all current available homes based on current absorption rate or sales rates. The most current MOI is 14.5 months (down from 14.6 months in June). Year over year MOI has been trending slightly upward as a result of both higher inventory and slower monthly sales. Inventory rates above 6 months indicate a buyers’ market, where there is an abundance of available homes compared to qualified buyers. A number below 6 typically indicates a sellers’ market where the demand for homes is greater than the supply. As a general rule, all other parameters being equal, home prices will trend lower in buyer markets and higher in seller markets.

Some Other Numbers That Influence the Market:
 
Unemployment
 
After several months of trending downward , local unemployment rates have climbed slightly to just above the 2010 levels - 8.1% in June (compared to 7.7% in June 2010). Recent unemployment levels had been slightly lower than the same months last year. Higher unemployment still continues to be the primary contributor to a lackluster housing market.

Mortgage Interest Rates
 
Mortgage interest rates continue to linger at historically low levels. The most recent weekly benchmark 30-year fixed rate as of 8/17/11 was 4.45% down slightly from the previous week’s rate of 4.46%. Historically low mortgage rates continue to provide some momentum to the market.

Our Summary Analysis
 
Currently considered a buyers’ market where inventory exceeds demand. Inventories are up and cumulative home sales are not selling at as fast a pace as they were in the same months last year. Despite higher inventory and less robust sales, median prices have continued to trend relatively steady. Low interest rates continue to provide some momentum for buyers; however, that is tempered by more rigorous qualifying guidelines and a tepid overall economy - still sluggish from higher levels of unemployment. Bottom Line - likely expect more of the same until job growth is more robust and unemployment levels begin to drop. As inventories continue to climb, there may be pressure on sellers to lower prices as buyers continue to be spoiled by choices. With historically low interest rates and plentiful inventories, this is an excellent time for buyers to make their move. New buyers, moving up or downsizing - now is a great time to take advantage of great values in the market.