State of the Island – Real Estate Sales on Galveston Island, Near Texas

State of the Island – Real Estate Sales on Galveston Island, Near Texas

It’s a new year and I dare say most everyone is glad to see 2009 end. There is new hope and heightened expectations for better days in 2010. And I must say, it feels good already! The phone is ringing more, there are more appointments on the calendar, more pendings on the board, and it feels good!

So I decided to do a little market research using our local MLS to try and figure out where we are. Galveston Island was hit by a hurricane in September of 2008 so I had to do my research ‘around’ that event. I wanted to see how much we have recovered from the first half of 2009 to the last half of 2009 and to see how that recovery compared to the state of the market just before the hurricane.

I chose the east end of the island where most full time island residents live. Here is what I found for the first half of 2009:

January 1 – June 30, 2009

And here is what I found for the last half of 2009:

July 1 – December 31, 2009

It appears that sellers are getting about $15 more per square foot for their property than they were in the first half of last year which represents about a 26% increase in sold price. That sounds pretty good. The Days on Market have gone from an average of 98 days to 122 days on market which is about right given our economy. And the list price to sold price is up about 1% since the beginning of the year.

But how does this compare to the state of the island in 2008 just before the hurricane? How far did we fall? And how much further do we have to go to get back to ‘normal’?

Let’s look at May – July 2008, just before the storm.

Before the storm, homeowners were getting $93 per square foot on average as compared to $74 per square foot on average over the last 6 months. So we are still down about 21%. Now I realize that some of the decline can be attributed to the down turn in the economy, but I think that is only about 5% - 6%.

Here is May – July 2007 which shows that the downturn in the market from 2007 to 2008 is about 5.5%, $98.80 per square foot versus $93.32 per square foot.

If we assume the downturn in the economy is contributing about 5% to the decline in the market on the island then it seems we are still down about 16% from levels before the hurricane.

I know that many areas in the rest of the nation have been hit far worse by the recession than we have here in Texas. And I am going to go through this exercise again at the end of April so I can determine if what I am feeling is being reflected in the numbers for 2010.

I do so hope that 2010 brings buyers and sellers together again and better times for everyone.