JANUARY- 2009

Maybe January is not the best month to evaluate the supply/inventory situation and define the number of months supply there is based on the sales so far for the new year, but 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 month's supply of homes.

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

That is not always an easy question to answer, but usually, inventory of unsold homes available should not equal more than a 6 to 8 month supply. Prices and inventory seem to set the theme and "location, location, location" is not always the final judgment of health or desirability.

As we began the new year, it was obvious that Asheville was not experiencing a "healthy" market. In 2008, Asheville and Buncombe County were continuing to hold steady at about 14 months supply, on average.

The winter is the normal slow-down time of year and inventory is normally reduced because some sellers do not want to have lookers go through the house in winter weather or can wait until the spring season when sales normally pick up.

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

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 owed, so as to prevent a foreclosure. Many banks are allowing the owners to stay for extended periods to see if a buyer will buy before a foreclosure takes place.

The real 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? It looks like the last 4 months of 2008 are going to be the worst months in years for sold units. January 2009 also looks like it will result the lowest number of units sold in over 12 years.

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

Copyright by Don Davies©