As the historic residential “spring market” comes to a close and we enter the transition period following the expiration of the tax credits, I am often asked questions such as, “where does the real estate market stand?” and “what is next in the recovery plan?”

Let’s look at the first half of 2010 to understand what we can expect moving forward. 

Overall, the trends have been very favorable in 2010.  I can best illustrate what is happening by examining one of our regions. In May, 2,537 homes were sold and the average closing price was $212,454.  This was the largest number of closings and the second highest average sales price in the past 12 months.  This is indeed good news and is reflective of most of the Carolinas. 

In that same region however, 259 homes were placed under contract in May. This is 31 percent below April and 12 percent below May 2009.  It is very apparent that we saw many sales that would have occurred in May shift into April so that buyers could take advantage of the tax credits, which expired April 30.  This drop in sales reflects what has taken place in markets across the country.

So what else happened in May?  The stock market rocked, the overseas markets fell and the oil spill captured the news. These are all reasons to cause a decrease in confidence, especially on large consumer purchases.

The question everyone is asking now is, where is the market going from here?  June is already much stronger than May, and July and August will be a great indicator for the balance of 2010.  (If we can survive this heat!)

If the market is to sustain itself without the support of taxpayer money, we will see those results within the next 90 days.  I remain optimistic for continual improvement.

Right now, buyers have a great advantage with interest rates falling below five percent and inventory remaining strong. For the sellers out there, understanding the “new norm” when it comes to pricing will be one of the keys to success.  The market will continue its steady improvement the next few years and be less volatile. 

Real estate is indeed returning to that steady long-term investment it has been since 1950.