As you can clearly see, 70 percent of the sales market is under $250,000. Is that healthy? I don't think so.
Here's what NAR Chief Economist Lawrence Yun says about it:
This is indicating that the first time buyers are typically on the lower price, looking for lower priced homes, so that is stimulating, and also for repeat buyers, I think this is a change in psychology or just a view that they want to stay well within their budget, and the tighter underwriting standards are also saying to people: Don't overstretch, if you overstretch we will not lend you the money.
He also re-trashed the new appraisal rules for slowing down the home buying process and stalling certain sales. But I think we're seeing exactly what we expected, which is that the "recovery" in sales was based entirely on juice from the first time home buyer tax credit and big activity on the lowest priced properties and foreclosures. My minions out in California, where foreclosure sales rule, tell me there isn't enough low-priced inventory. With the mid and high end still stuck, there's your sales decrease.
Until we see recovery across the market, at all price points, we can't say this housing market is in full recovery.