First a review of where we came from. For Lexington, the market volume peaked in 2004, and the prices peaked in 2005, at an annual median price of $725,000. Prices have shown approximately a 4% pullback since that time. The number of homes sold in 2004 was 357. In 2007, 345 homes sold so the volume has only dropped 3%. So far in the first half of 2008 there have been 133 sales, so the market volume is a little low, but remains healthy.
There is a strong seasonal effect on the Lexington market with Q1 (Jan, Feb, Mar) and Q4 (Oct, Nov, Dec) being market lows. This seasonality should be taken into account when looking at any monthly data. 2008 Q1 volume was very low, but Q2 ( Apr, May, Jun) sales volume was good matching the same periods in both of the previous years. It should be expected that prices will continue to be strong through the summer.
Generally there have been fewer homes on the market this year. With sellers holding homes off the market and thereby restricting the supply, it is seems unlikely that any drop in prices will occur. General economic forecasts seem to hold that 2008 will see the bottom for this cycle, further supporting this view. Real estate markets tend to a 7 year cycle, so with a peak in 2005 it can be expected that the bottom should be in 2008-2009.
What this means for homeowners in the near term is that there is still a stable demand for homes and that while sale prices will be down from 2005 highs Lexington continues to be a high value market, and homes can be sold quickly. Homeowners who purchased more than 4 or 5 years ago still have significant equity, those having purchased or re-financed recently unfortunately will likely not see price appreciation until 2009 and beyond.
Now for the summary of July results, and where we are today. In the Single Family market, there were 125 properties listed for sale August 1. This is down 18% from the same time last year. The monthly median sales price data continues showing seasonal strength as we move through the summer months, and is in fact higher than July of last year at a value of $802,000. Average time on market increased to 110 days. There were 44 homes sold in July, the same number as July 2007. Currently the supply of homes for sale is down to less than 3 months. This indicates that the Lexington market is strongly in favor of those selling property.
For anyone interested in seeing the graphs and numbers behind these comments please go to my website www.MikesREALSolutions.com and look in the community for which you are interested. The reports are available for download as a .pdf file. You can e-mail me at Mike@ MikesREALSolutions.com with any questions.
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