We're starting to see stabilization in prices in our area......I guess that means we're at or near the bottom......if only we had a crystal ball. I do think the crystal ball would tell us that until short sales and foreclosures are becoming a thing of the past, instead of a major part of the present, that we won't see appreciation and we'll probably still see pockets of price drops in areas. While I'll never be able to predict the future, what I can give you are the facts:
Condo Market. The number of condos going under contract in August this year doubled compared to August 2008, showing significant growth in consumer intensity. All totaled, the number of condos going under contract year-to-date this year has exceeded last year by 499 units (up 85%). Condo inventory also continues to decline with supply shrinking a total of 515 units (down 15%) in the past 15 months. While the shrinking supply could eventually cause condo prices to rebound, foreclosures and short sales dominate the market and seem to offset any upward price momentum for now. Short sales and foreclosures accounted for for 44% of all units going under contract in August.
Home Market. Like the condo market, the home market continues to improve. The number of homes going under contract year-to-date this year has increased by 548 homes (up 29%) compared to last year. It is important to note that 2009 is the first of the past four years to show meaningful improvement. Home inventory stayed steady in August, but continues to show overall decline with supply shrinking a total of 805 units (down 20%) in the past 15 months. This spells good news for home sellers who are anxious for a shrinking inventory to begin balancing the market and stabilizing prices. While some stabilization has occurred, short sales and foreclosures continue to offset this gain by applying downward pressure to prices.
Vacant Land. The glory of land prices in past years is a distant memory, and this market continues to lack direction. Improvement isn't likely until builders, who traditionally participate in 80% of all local sales, resume vacant land acquisition. Trying to find a buyer to purchase lots and build is like finding a needle in a haystack. So many of our buyers are from out of town and the hassle of building vs. already completed is taken into account.
Properties ‘Going Under Contract' vs. ‘Closing'. While the number of properties going under contract have taken a dramatic upswing in the past 3 months, actual sales (closed contracts) are not yet showing the same improvement. Nearly half (48%) of all short sales going under contract this year have failed to close. The amount of time required to close a short sale remains about 5+ months; so the final result of the spring-summer buying surge will not be known until September (or after) sales are counted.
Please drop me a note with any questions or comments you may have. I'm always eager to talk about our local real estate market.
Comments(0)