Slow First Half of 2008 For The Richmond Market

Can you believe we are already half way through 2008? With the end of June comes the mid year housing numbers. As I sit here and look at the numbers I am starting to see the true picture of our economy. Mid year sales numbers are off the number of units sold in 2007, almost 30% in the Richmond Metro area. According to the Central Virginia Regional Multiple Listing Service*, 8,025 homes were sold in the first 6 months of 2007 compared with only 5,785 units sold the first half of 2008. Compare this to the 9,063 that were sold the first half of 2006 and you can see what a slow year this has been.

As the units sold have shown a dramatic decrease, the number of new listings is relatively unchanged, with 18,022 new listings so far this year, and 18,880 in '07. This number, coupled with the units sold data represent an increase in housing inventory on the market.  But an interesting fact is that the Average Sales Price is fairly stable and has actually risen slightly this year. The days it takes a home to sell or DOM has risen an average of 8 days since 2007, taking a home from 65 days to sell in 2007 to 73 days in 2008.

What does all this mean? The second half of 2008 will see a slight sales price reduction to thin the market of it's excess inventory. As sales prices begin to drop I would also expect the DOM to remain the same or slightly drop for the second half of the year. How far this will go is all up to the state of our economy. Energy prices, rising food cost job layoffs, foreclosures and just a slow economy in general will keep the real estate market in a slow growth pattern in the near future.

National sales numbers have shown a slight improvement but Lawrence Yun, National Association of Realtors chief economist, said in a press release " It’d be premature to say the improvement marks a turnaround. The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming.”

Let's all hope this will happen.

YTD Activity Report 1/1/2008 through 6/30/2008 by county

New Kent:  Avg List Price- $363,209  | Avg. Sales Price- $296,987 | # units sold - 102 | DOM- 109
Charles City:                   $295,354 |                         $174,000 |                        9  |            66
Hanover: Area 36            $416,301 |                          $356,263 |                     207 |            76
     Area 44                     $325,890 |                          $280,825 |                     250 |            65
King William                    $243,212 |                         $219,897 |                      84  |             72

If you would more sales data e-mail CEvelyn@FirstAdvantageRealtors.com


*Data was taken in the top 35 sales areas of the CVRMLS. Data deemed reliable but cannot be guaranteed.

Charles Evelyn is the Principal Broker of First Advantage Realty located in Providence Forge, VA