There are no silver bullets.
There are no silver bullets.
There are no silver bullets.
There is merely a pile of data.
Correction: piles and piles and piles of data.
SOLD UNITS
- June 2009: 873 sales units
- June 2008: 867 sales units
ACTIVE UNITS
- June 2009: 5126 active units
- June 2008: 6596 active units
MONTHS OF INVENTORY
- June 2009: 5.87 months of inventory
- June 2008: 7.6 months of inventory
- June 2007: 6.1 months of inventory
AVG SALES PRICE
- June 2009: $225,400 avg. sales price
- June 2008: $256,800 avg. sales price
- June 2007: $276,100 avg. sales price
June 2009 marks the first time there has been a year over year improvement in single family units in 39 months (last month that was a gain was March, 2006). Seasonally a two year low in months of inventory. Absorption rate remains at a 10 year low, June averaged 1083 closed sales from 1998 to 2007.
Role play:
- Does supply and demand rule all markets? Y/N
- What is going on with our demand based on this data, is it going up, down, or relatively stable?
- What is going on with our supply, is it going up, down, or relatively stable?
- If prices were forced down because demand went down and supply went up, what do you think might happen now that supply is down and demand is stabilized and trending up?
Now granted, this macro data does not apply to every home for sale, every neighborhood, or even every buyer. A buyer with a home-sale contingency or clause in their offer that clouds the seller's decision with doubt as to whether it will close or not has almost no negotiating ability. Local seller perceptions are that the market HAS BOTTOMED OUT and are less and less likely to discount their homes any further. Buying perceptions are that the market offers a good time to buy, so why not try and get a better price.
July 2008 saw 886 units close and August 2008 had 778. I'm hedging that neither July nor August 2009 will pass those numbers, but will be close. After those two months in 2008, the market began a severe erosion due to the credit crunch expanding into a full-fledged crisis. It now seems reasonable that despite the 9.4% decline in units sold year over year, that the 2009 market will sell very near the same number of properties as 2008 (8339). This is primarily due to the awful numbers posted last fall and the stimulus of the first-time buyer credit propelling transactions this fall through at least the November 30, 2009 deadline for action on the tax credit. Because of the crisis exploding onto the scene, prices tailed off dramatically last year, with the average sales price sinking from $256,829 in June, 2008 to $213,466 by November. The market now operates in a post-crisis environment. Correspondingly such a dramatic decline is unlikely this year because the market that was buying those homes on average at $213,466 is the same market that is buying homes today at $225,402. If anything, it will remain relatively stable, within +/- 4% through year's end. Seasonally, June average sales values should be higher than November average sales values, so it is foolish to point at November 2008 and then June 2009 and say that there is "appreciation". But it is logical to say that the similarities between the two shows that values have stabilized for the first 80% of the market in price (up to about $300,000).
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