Real Estate Information

The latest sales data show a small but unmistakable uptick in activity and declining unsold inventories. In late December, the National Assn. of Realtors reported that existing home resales were up by a hair in November — 0.6% — the second straight month of modest increases off the cyclical trough in September. On Dec. 27 the Commerce Department reported sales of new houses rose 3.4% over the previous month, while builders' unsold inventories dropped to their lowest level since last February.

Some local markets are moving contrary to the relatively flat national trend. Three dozen metropolitan areas — primarily markets with moderate prices and solid employment growth — were still racking up low double-digit house price inflation at the end of the third quarter of 2006, according to federal data. The L.A.-Long Beach-Glendale metropolitan area continued to chug along with an annualized appreciation rate above 7%. Dozens of other areas — primarily where unemployment has been a persistent and increasing economic drag — showed signs of modest deflation in home values, according to the same data.

Moderate price cuts also eventually stimulate buyers — who'd been sitting on the sidelines wondering when the market might bottom out — to wade back in and start shopping again.

That's where we appear to be at the moment, and where we're headed in 2007, absent unexpected economic jolts to the global capital markets that could send mortgage rates spiking. In that event, all bets are off.

In most places, buyers still have the upper hand. There's plenty of inventory to choose from, shoppers are picky and unrealistic pricing is a guaranteed route to sitting dead in the water for months, unvisited and unsold. Be realistic on pricing. And be happy there are buyers out there again.