Real Estate Market January 2008
In-Depth Analysis January 2008 Market-at-a-Glance The Market-at-a-Glance section contains an overall summary of the trends described in our detailed articles. A recap of the current market indicators are as follows: 1. Resale Listings – 54,513 a. This has been the second month in the past eleven with a decrease in the number of resale listings. The decrease from November to December was 2,237 (3.9%). The trend of this metric shows that listings have been increasing for the past 30 months. The December decrease fits the normal calendar cycle. 2. Resale Sales – 3,412 a. Resale sales volume is down from this month in 2006 by 1,981. b. Resale sales volume is down 3,137 sales from this month in 2005 (the Decmeber 2005 figure was inflated by speculator activity). c. Resale sales volume is down 4,490 from this month in 2004 (the December 2004 figure was very inflated by speculator activity). d. Resale sales volume is down 2,945 from December 2003. e. Resale sales volume is down 2,528 from December 2002. f. Resale sales volume is down 1,054 from December 2001. 3. Resale Sales Price - $229,800 a. The median December sales price is down by $2,700 from November 2007. b. The median sales price has declined $25,200 in the last five months. c. The median sales price is $30,200 below the September 2005 level. d. The appreciation rate for the last twenty-seven months (September 2005 to present) is a negative 8.6% on an annualized basis. 4. New Home Market a. The number of New Home specs in December decreased by 104 from the November count to 3,739. The record level was in October 2006 at 4,692. Prior to February 2006 the record was 2,400 homes. b. The number of new home subdivisions selling dipped for the second time in the last six months - down by 11 to 1,102 (the largest number ever recorded prior to 2006 was 813 in May 2003). The spec inventory remains far above norm. That level is currently about double the level that has historically been healthy for our market. What will it take to get the inventory level back into a normal range for our market? Sales have now been below the 2002 level for seven months. I believe that a major portion of the drop in sales from the 2002 level can be attributed to three factors: 1. Potential buyers waiting to be able to sell their homes 2. Buyers concern about the magnitude and timing of the market price correction 3. Tightening in mortgage qualification criteria. This is not true of the drop from 2004 - 2006 which can be almost totally attributed to drastically reduced speculator buying.
Markets Adjust Nationally
The National Association of REALTORS® (NAR) reported in late September that existing homes sales fell in August, caused in large part by recent adjustments within the mortgage industry. The overall national market for existing homes slowed 4.3 percent in August. NAR still anticipates close to 5.5 million units to be sold in 2007, which is 12.8 percent below last year's pace for existing home sales.
On September 28th, the Wall Street Journal reported that the thirty year conventional, fixed rate mortgage was averaging 6.42 percent, which is up from 6.34 percent earlier in the month. Still, NAR president Pat Combs explains that today's mortgage picture is getting better. "Mortgage interest rates have been declining and loan availability is improving,” she said. “Movements to enhance the FHA loan program and to raise the limits for conventional financing could provide additional relief, and it looks like the worse of the mortgage availability problem is behind us. The abundant choice of homes is permitting buyers to better negotiate price and terms. There are good opportunities in the market now, especially for first-time buyers.”
The national median home price for all types of housing was up .02 percent from this time a year ago, to $224,500. The median is the typical market price where half of the homes sell for more and half sell for less. "Price gains in the Northeast and Midwest were largely offset by a decline in the West, while medial existing home price in the South was down slightly, demonstrating that all real estate is local," Combs said.
Advice for Home Sellers!
Competition for qualified buyers is greater than it has been in years past, but there are still buyers out there who are willing, able, and interested in purchasing your home! If you are realistic about what it takes to sell in a buyers market — and you are willing to meet the buyer in today's market — then success can be yours! Here are a few tips to make your home stand out from the crowd:
Pricing - Price your home realistically. Remember, buyers are comparing your home against all others and are looking to stretch their dollar. By pricing your home to sell, you end up saving time and money in the long run by keeping your home from being shop-worn and overlooked.
Home Inspection - How does your home stack-up against new construction? Pre-existing homes often require more effort to maintain. By ordering a home inspection and fixing any known defects, buyers can be confident in what they're buying.
Incentives - Buyers love incentives. With larger housing inventories, incentives can be the deciding factor between your home and the competition. Consider offering a free home warranty, a carpet allowance, or assistance with closing costs. Incentives don't have to cost a lot to be attractive.
By offering value, you attract buyers and enhance your property's desirability. If you are thinking of selling your home, please contact us for a current market analysis and marketing consultation. There is no obligation for these services.