(Graph: The Cromford Report)

This time of year the real estate market usually goes to slumber like the bears in the wild: sales drop, inventory grows, activity decreases.  Well, not this year: this is an unusual year, one full of a mixed bag of goods from which you can pull out the most delectable candy or cut your self on a rogue razor blade.

This is the November 2009 real estate market and it's flat, and flat is good when compared to the historic norm and in light of this economy, but flat may be deceiving because under the surface there is some shaking going on: the dips and peak are just beneath us, beneath the delicate flatness that we have.

In November 7,637 home sold which is only 250 less then last month and only 800 less then in September. 

Pending sales a very good indicator of the strength of the market shows 11,441 pending homes.  Less then last month and the previous quarter but almost double that of 2008.

Active homes are about steady at just under 40,000 or the same as it's been for 3 months.

Inventory/Supply is at 5 months: so, about balanced - theoretically!

So in the case when the normal seasonal cycle calls for higher inventory and lower sales and the actual numbers are flat that means an improvement and normalization of the market except that we still distress in the market.  Below is a look at how influential the short sale and lender owned homes are with a combined 63% share of the market.

Lender Owned

                 November | October | Last Quarter |  2008

Active        13%            12.5%
Pending     39.9%          41.4%  
Sold          43.5%          47.1%         53.3%        56.1%

Short Sale

Active       37%             37.3%
Pending    35.3%          30.3%
Sold         19.6%          19.2%          17.1%        10.7%

Appreciation rates have been increasing.  Though looking at negative appreciation rates is painful they are in the teens instead of for instance 58% which we had a few months ago.  This means that prices are going up and at this rate we should have a year over year positive number in the second or third quarter of 2010.

The recovery will be slow and often painful.  With possibly higher interest rates ahead and a weak job market and an end to the housing tax credit in April 2010 the influence of distress will be felt for a few more years.  There are a lot of buyers our there, but there are many people being taken out of the loop with no jobs and weak credits.  Further more the very common and life sustaining FHA loan will be more difficult to obtain: the FHA has lots of bad debt and limited funds.

So far, for buyers, it is an opportunity, a frustrating one, but it is an opportunity especially in the hard hit areas.  Despite the depressionary pressures on materials prices many homes are well below replacement cost, a very clear signal of a good buy: just do it carefully and for the right reasons.