According to many of the financial pundits, the passage of tax reform assures another great year in real estate. According to The Conference Board, the Consumer Confidence Index® improved in October and increased further in November.
The Index now stands at 129.5 (1985=100), up from 126.2 in October. The Present Situation Index increased from 152.0 to 153.9, while the Expectations Index rose from 109.0 last month to 113.3.
As noted last month, real estate inventory levels in both the condo and single family home arenas are low. As indicated on page 2, the total dollar volume of sold properties is up significantly over last year, which causes many to ask if we are heading toward another bubble.
The answer is, probably not. The 2007 bubble was much the result of the unbridled availability of credit, coupled with little or no down payment requirements. Outside of FHA and VA type loan programs, real estate sales today have 20% down payment requirements. Many of our sales today are cash. It is safe to assume that a buyer who purchases a $3 million home with cash is spending his/her last $3 million.
The highest dollar sales in November were a $2,649,000 condo and a $5,950,000 single family home. Interestingly, both properties had incredibly long days on the market. Respectively, they took 2,028 and 1,966 days to sell.
We end the year on an incredibly welcomed high note and anticipate an equally upbeat message this time next year!
Merry Christmas, Happy Hanukkah and May Peace Be With You!
Ed, Terri, Kay, Denis and Tammy