The new reality in home prices

We have to look at what we have, not what we had.

That's the advice of Suze Orman, personal financial guru.

What we have are glimmers of better days ahead. The stock market had a bit of a rebound. Nationally, existing home sales in February rose 5.1 percent. And with low interest rates and tax incentives for buyers who haven't owned a home in the last 3 years, it's a super time to make an offer.

Locally, buyer activity has picked up, with more people looking at homes, though that has not yet translated into homes going under contract. Buyers seem to be waiting until it suits their move schedule and they find the best house at the lowest price.

Home sale volume in Spanish Fort, Daphne/Montrose, Lake Forest and Fairhope/Point Clear was little changed in the first quarter of the year. There were 157 sales vs. 162 sales in the last quarter of 2008 and 171 sales in the first quarter of 2008..

Pricing remains soft. Average sales price was $223,575 in the 1^st quarter, compared with $260,838 in the 4^th quarter of 2008. Average sales price was $277,677 in the 1^st quarter of 2008.

The recent average sales price reflects the lack of activity in the $300,000+ range. There are more than 500 homes listed in that price range, but only 31 sold in the 1^st quarter.

Obviously this affects the average sales price, but it also has resulted in depreciation in this price range as an unsettling number of builders lose inventory to foreclosure, and corporate relocation companies dump properties to get them off their books.

You may have read that home prices in 20 major cities fell 19 percent compared to January 2008, according to Standard & Poor's/Case-Shiller index.

Locally, it appears that prices have dropped 10 percent to 15 percent depending upon the location, age and condition of the house during this recession. Foreclosures aside, distress sales (divorce, estates, etc.), corporate relocation sales and equity heavy sales have set a benchmark in appraisals.

This means as much as you would like to sell your house for a 2005-2007 price, it probably won't appraise for it. And if it doesn't appraise, then the buyer cannot get his loan.

So this is our new reality. This is what we have, as Suze says.

Here's one more look at 1^st quarter numbers:

Fairhope: 59 homes sold with an average price of $242,771, compared with 61 sales with an average price of $312,432 during the same time last year. Homeowners took on average 6% off their list price to sell. Average time to sell: 236 days. Homes on market: 549

Daphne: 47 homes sold with an average price of $305,254. In the first quarter of 2008, 67 homes sold with an average price of $258,690. List-to-sale percentage: 95.37%. Average days on market: 128. There are 367 homes for sale.

Lake Forest: 24 homes sold with an average price of $140,756, compared with 20 sales with an average price of $161,194 the same time last year. Homeowners here only took 3% on average off their list price. Days on market: 147. Homes on market: 132.

Spanish Fort: 27 homes sold with an average price of $231,161. In the first quarter of 2008, 23 homes sold with an average price of $282,572. Days on market: 157 days. There are 132 homes for sale.

(Sales figures are from the Baldwin County Multiple Listing Service.)