"Study the past if you would define the future"
As we head into the holiday season and the end of the year there is much uncertainty in our real estate markets. In Montgomery County we tend to fare better than the national market but it's critical to remember that all real estate is local! While California, Nevada, Florida and Arizona are all suffering heavy foreclosure losses, the cause of their distress is unlike states like Michigan or Ohio where they have massive job losses to contend with. Speculative behaviour led to unrealistic increases in pricing, not in line with real wages. And of course greed led to fraud in many segments of the market. Cheap money fueled it all...
That's where the wise Confucius comes in... it was never a good idea for any buyer to get something for nothing! But they fed into the frenzy of getting homes at any cost and then those same buyers slammed their collective feet down and said "no more" right about August of 2005. Leading to our current stats... Our Montgomery County inventory levels are still significantly higher than in years past:
- Single family homes - 2691 active
- Townhomes - 1358 active
- Condos - 1105 active
The telling part of the story is in the drop in volume sold of almost 35% from October of last year. And we are down 36% in units sold from this time last year.
- But on the flip side, 633 homes sold for a total volume of $330,144,162. Their average sold price was up around 2% and their median down around 3%. That average selling price was at $521,555! That's the average for the whole county. So homes are still selling. They are not all in foreclosure (next month's topic by the way...). And they take a bit longer to get sold with less of the list price commanded. About 92%.
As sellers you need to be completely realistic about the market and pricing. It means condition is KING and it means realistic expectations about what buyers are asking for and getting. As buyers it means you have more choice but in prime areas if the home is priced well and in good condition it's gone quickly with a great deal of interest. Time and again I've seen buyers lose the home they really wanted because they didn't fully understand that all real estate is local. It's about the micromarkets! If you know those trends as a buyer or a seller then you are equipped with enough information to make a good decision. Sure makes the rest of the process a whole lot easier...
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Information Source: MRIS - Information is deemed reliable but not guaranteed.
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