I know that bad news sells better than good news. Everywhere you turn lately you hear the screams of doom and despair about the collapse of the real estate market. Well, I’m here to tell you that here in Caldwell, Nampa and the rest of Canyon County, Idaho, the real estate market is doing pretty well, thank you.
The Idaho Statesman ran an article headlined “Canyon County Home Prices Drop”. They include a chart with an ominous downward trend line depicting a reduction of the median price in Canyon County. The article describes a 12% reduction in price from January ’07 to January ’08.
That is accurate. Except that they did not slice the data to look at what impact this is having on my clients, all of whom are selling existing homes. When you do that, you find that new construction is getting hammered, but existing home prices are down just 5.1% year to year. The article also ignores that existing home prices are still up 3.8% from January 2006 and – get this – 43.6% from January 2005. Hmm. That’s a little different.
Are those existing home sellers desperate? Not so much. We are still enjoying a 97.2% list price to sell price ratio. The buying pace certainly isn't frantic, but there's not a lot of price slashing going on there, either.
So aren't houses taking a lot longer to sell? Nope. Average days on market (DOM) were 84 for existing homes closed in January of 2008 compared to 83 days in 2007. Even 2006, when houses were supposedly selling overnight, had an average DOM of 64. By way of comparison, the average for January from 2002 to 2008 was 94 days.
So while I wouldn’t want to be one of the larger builders right now, I’m pleased as punch to be selling houses for folks who still have equity from 2003 or 2004 or even 2005. Yes, we’re selling at prices that are lower than they were last year, but we’re still selling at a profit and that’s what matters.
Then, we’re taking that money and buying bigger homes from builders (who do need to sell) so we’re doing pretty well on the buy. (Remember, these are the houses that are down a bunch from last year!). When things turn around (and they always do) we’re going to make even more. Not bad for a "down" market.
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