Market Conditions: February 2008 – Hemet, CA

The data analogized in the segment if for the period of February 2008 and how it compares to the activity of February, 2007.  First, it should be reported a 59.38% decrease in the number of closed escrows – dropping from 64 residential properties reported in February 2007 to only 26 in February. 2008.

Perhaps the most shocking difference between the two periods is how close the AVERAGE LIST PRICE is, with only a 4.3% difference.  February 2007 saw an average asking price of $302,742 while February, 2008 saw only a $13,012 drop in asking list price of $289,730.

However, as we know, asking and receiving are two different things, especially when it comes to selling a home in Hemet, CA.  The AVERAGE SOLD PRICE in February 2007 was 99% of the LIST PRICE at $300,059 while the same period a year later saw the AVERAGE SOLD PRICE dip 10.4% to $268,842 which was 93% of the AVERAGE LIST PRICE.

In February 2007 the AVERAGE LIST PRICE per SQ FT (LP/SqFt) was $201 per Sq Ft and the AVERAGE SOLD PRICE per SQ FT (SP/SqFt) was close at $200 per Sq Ft.  February 2008 saw a 26.87% dip in the LP/SqFt seeking only $147 per sq ft and ending up accepting only $136 SP/SqFt; 93% of the LP/SqFt and 32% less than the same period a year earlier.

It should be noted that more and more newer and larger homes are being added to the mix.  Whereas the size of the average home on the market in February 2007 was a 3 bedroom 2 bath home with 1546 square feet of living space the average home reported sold in the MLS in February 2008 grew by an entire quarter of a bathroom and 372 square feet, coming in at 1918 square feet

Finally, I’d like to conclude this segment of Hemet Market Conditions by looking at the Days on Market (DOM).  It is very common for any report to show that the minimum DOM is zero – and the data I have looked at confirms this.  What this can be interpreted as an agent having a buyer for a property before it reaches the MLS.  There are times, when an agent never lists the property until he sells it himself – this is referred to as a “pocket listing”.  Although not popular with other agents in Hemet, there is nothing wrong with the practice, so long as the seller is fully aware.  In both months – February 2007 and 2008 there were listings that sold with zero DOM.

The story is the AVERAGE DAYS ON MARKET.  In February 2007, the 64 listings that closed escrow that month took an average of 84 days to receive an accepted offer – with the longest sitting on the market 240 days.  In February, 2008 the average DOM spiked by 17.86% to 99 DOM with a high DOM of 282 – a 17.5% increase over a year earlier.

Conclusion:  The market is not what it once was and despite rumors and the occasional exception to the rules, prices are not taking as big a beating as some would like us to believe.  Remember, “Figures Don’t Lie…Liars Figure”, so be careful when you are listening to people talk about the doom and gloom of the Hemet Real Estate market.  It is true that fewer homes are selling and only the best homes at a price point are selling, but many of the homes that sold in February 2008 sold with multiple offers, once they were priced right.

AFTER THOUGHT:  After I originally published these results, I realized a very significant event happened just 10 days after the end of the 2007 period.  On March 10, 2007 New Century funded it’s last mortgage – signaling the beginning of the ‘sub-prime meltdown” or the “bursting of the bubble”.