Anyone who has read my report for a while knows that I am not one to spin the data. But I would like to take this month's report to look at the positive facts.
So lets look at what we know.
Unemployment in the state for the first quarter was at 3.7% and only slightly worse than last year (3.5%). Much better than our neighbor to the south, Massachusetts, at 5%. Employment has been fairly consistent over the past couple of years. Although the figures are nice to look at, I think at times it is better to consider how people feel about their job situation. Based on the people with whom I have spoken, I would say that not many are worried about their job. That's pretty positive.
To illustrate the strange effect we are seeing in this market where job security is high, we can look at what is happening with prices. The average price per square foot of a home sold was down 4% from last year yet the average selling price was down only 1% from a year ago. So it seems that as the prices of homes come down, people are buying more house. Perhaps it is a slightly larger home (The average size of a home sold in Q2 was 2,333 sf, the highest of any quarter since 2001!) or it has more features. The fact is, buyers are able to afford homes and show a willingness to spend the money to get what they want. Again, this would not happen in a poor economy!
We also know that the time that a sold home was on the market came down this month (128 days) and sold closer to its asking price (within 2.5%). Sellers seem to have adjusted to the real estate situation and have lowered their asking price. The homes that are well priced are selling.
I find it hard to look at this market and be pessimistic. True, we are clearly in a buyers market with a 9.6 month supply of homes. (a 6 month supply is considered balanced) But we had a very hot market up until late 2005. Though it was a lot of fun while it lasted we are only just getting back to a more realistic and, hopefully, sustainable market. Now if we could only get the news media to report more realistically I think we would be in much better shape.
Enjoy the rest of your summer!
Market Notables
- Single family home sales in July were down 19% from July 2006.
- Single family home sales YTD through July of 2007 are down 8.6% from 2006.
- The number of homes placed under contract in July were up 10% from last month (unusual for the time of year) and up 12% from July 2006.
- The number of single family homes on the market was up 3.3% in June 2007 versus 2006. This further increases seller competition.
- The average price of homes sold in July was nearly unchanged (-1%) from a year ago at ~$388,000.
- The average price per square foot of a home sold in July is $169/sf . Down ~4% from a year ago.
- The number of days it took to sell a home that sold in July was 128 days. Unchanged from July 2006.
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