Happy post-holidays, LVA readers. I hope that each of you received something as cool as my new Garmin Street Pilot 550 GPS system. I know each of my clients who bought properties in December received a great gift – LOTS of equity in their new investment home! I think I worked harder than Santa to fill their stockings, and seeing their little faces light up with glee was much more rewarding than milk-and-cookies after free-falling down a soot-lined chimney.

Judging by the flood of calls this week, the number of folks toying with the idea of buying is on the rise, as I predicted. Despite the traditional winter slowdown, the average homebuyers—who’ve been putting off buying a home for months—are starting to look. When Mr. and Mrs. Average Homebuyer perceive we’ve reached the bottom, they’ll start to buy. Savvy individuals, of course, don’t wait to see what the average homebuyer is doing. They get in front and lead the way, reaping the biggest rewards.

I can’t imagine a more perfect buyer’s market—and I thought 2004 was a sight to behold! The number of pending sales are beginning to rise, yet prices are still dropping; in other words, desperate sellers don’t yet realize that they can perhaps hold out for a better offer as buyers enter the market again.

Pending sales began to rise a bit in November, then flattened out again as the holidays drew close. November sales (closed, not pending) were flat, but take that as a good sign. For a year the number of sales dropped every month, then in November the slide halted. December sales closely paralleled November sales. This is historically the time when sales really begin to taper off--yet the downward sales spiral had flattened out!

By the end of February, pending sales should again begin to rise. A rise in pending sales in February or March generally means a rise in sales in March or April. And when the pendulum swings back and inventory is absorbed, prices begin to rise and … well, don’t wait that long to find you’ve missed the opportunity to get out ahead of the crowd on this one.

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