August- 2009

To have some idea of the health of the market, you must compare the current inventory to the number of sales that has taken place to project the actual number of months supply of homes.

The redundant question is: What is a Healthy Real Estate Market?

Rule of Thumb: That is not always an easy question to answer, but usually, inventory of unsold homes available should not equal more than a 5 to 7 month supply. Asking prices and inventory seem to set the theme.

More than halfway through the year, it is obvious that Asheville is not yet experiencing the "healthy" market we had 2 years ago. In 2008, Asheville and Buncombe County were continuing to hold steady at about 14 months supply, on average. So far, in 2009, the average is over a 20 month supply.

As indicated below, we have 2.93 times more homes on the market than what a "healthy" market should have. This is a positive decline since May but a negative compared to August 2008.

In Asheville, we are still continuing to see a slow, but small, reduction in home prices, as the inventory sits at the top of recent high numbers, and the July inventory numbers are moderating.

There has been an increase in the number of properties offered under the "short sale" concept, which is where the mortgage holder agrees to let the owner attempt to sell the house for less than what is actually owed, so as to prevent a foreclosure. Many banks are allowing the owners to stay in their homes for extended periods to see if a buyer will buy before a foreclosure takes place.

The ongoing area of concern continues to be about the homes over $400,000. The worrisome market is the homes at or over $1 million. The number of sales per month compared to the existing inventory suggests a rather long term for that inventory to either shrink or see prices drop by large percentages.

Sales of homes under $285,000 seem to be stable with only a small excess in inventory. This would indicate that the "average" buyer has plenty of homes to choose from and most of them are at fair market value.

The question is....where are the buyers? January 2009 looks like it will produce the lowest number of units sold in a month in over 12 years. August sales have been below 2008.

Residential Properties = Single Family Homes, Condos, Townhouses & Mobiles on Owned Land

Copyright by Don Davies©