I've looked at the Rockford Area Realtors® (RAR) sales numbers for April 2008. For some reason I couldn't get the numbers reported by RAR and the Rockford Register Star (RRStar) to match the numbers I found.
They reported 348 houses and condos sold in the Rockford, Illinois region in April 2008 with an average sale price of $139,332. Using RAR's "CMACNT" function on the MLS, I could only find 338 sales in the Rockford, IL region for April 2008. I suppose a swing of 30 sales plus or minus doesn't make much difference when the overall decline in sales is 34% (April 2007 recorded 513 sales). I believe average sale price is the "mean" rather than the "median".
I'm not enthusiastic about using the "mean" average for comparable purposes. It's too easily influenced by the extreme outliers. For example in April 2007, four $500,000+ sales accounted for $2,296,000 in total sales. In April 2008, only 2 sales exceeded $500,000 accounting for just $1,093,000 in sales. Because of anomalies like this, I'm more comfortable using the median as the base for historic comparison.
In April 2007 the range prices for the 513 sales was $6,900 - $725,000. The median was $134,000 (256 sales were above that price, 256 were below it). In April 2008, the 348 sales recorded at RAR MLS had a range of $9,000 - $548,000 with a median sale price of $126,250. That represents a decline of 34% in total sales and a decline of 5.6% in the sales price. It's also worth noting that the average Days on Market increased from 75 days in 2007 to 94 days in 2008 (a 25% increase).
It should also be noted that nearly 40% of the sales above the median were new construction. In fact, all of the new construction houses/condos sold in April 2008 (65) had sale prices above the median. In 2007 only 28% of the "above the median" sales were new construction and 7% were below.
Analysis of the "below the median" sales indicates that 1 in 4 (25%) of were foreclosed properties. Predictable, the majority of those sales can be found at the bottom of the range.
One of the numbers I'd like to know, but am unlikely to be able to determine with any confidence, is the number of sales by investors/flippers. They too are having a significant impact on the market.
So what do these numbers tell us other than SALES and PRICES are down and Days On Market are up. They tell us that the normal home owner that wants (or has) to sell his or her house right now is facing a difficult dilemma. They're competition is extraordinary. Not only are the number of active listings at record levels (3415 as of May 2nd), their toughest competitor isn't the neighbor down the street. It's the builders (25% of all listings), banks (REO/foreclosures), and investor/flippers (rehabbed completely). Most of them have the resources to offer incentives or to sell below market in order to accomplish their goal...get the house out of inventory. Most "regular" home sellers have limited choices...1. Put the house in A+ condition and/or 2. Price it below market. Either way...if you have to sell now...plan on getting a little bit hurt in the pocketbook to make it happen. On the other hand...if you are also going to buy...don't be afraid to dole out some punishment of your own...in fact...have fun...beat up a bank, or builder, or investor...and do it with a smile...because when you finally close on your purchase...you should be getting a better deal than when you close on your sale.
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