2008 in a handbag – Where has the year gone?

Some of the year end numbers have finally posted and what a year it has been.  The actual totals will be all available next month for close out purposes, but I have pulled some of the statistics from MLS myself.  The December Housing report for Frederick is done and you can see it here.  We finished on a positive note with a 32% increase in Contracts over last year.  Inventory levels are promising as well by show less than last years trends.  Sales were only off by 6.5% from last year.  Will this carry over into 2009?  Sure it will.  I am sure we will see some flashes of hope with some discouragement, but we will make it through the end of the housing bust.

This wasn’t a bad year for me nor has it been a great year.  There were approximately 1300 REALTORS® in Frederick County (not counting the agents from adjoining counties that do business here) prying for almost 2100 sales in 2008.  (I must remind you, these are not official only very close approximates.)  I was fortunate to eight sales of my own.  Majority of this year’s business for me had been below $300,000 in within walking distance to downtown Frederick.  It seemed to me the upgrade from the town house to a larger single family was very scarce.  Condo prices just weren’t low enough for sales.    But again it was the overall inventory that hampers the sales along with the large amount of short sales and foreclosures.  The tightening of the purse strings by the fearful banks didn’t help either.  But as a local appraiser has said before, it is all about the inventory levels.   We need to get below 1100 to be healthy.

This market has had it’s toll on local real estate companies as well as agents.  Plenty of local offices shut their doors or consolidated in other locations.   I have seen remodeling companies increase thier business as people are staying put in their current digs.  This market has had it’s challenges for the builders as well.  They don’t have any traffic in their developments and have had to lay off many workers.  In years past, it would take more than six months to build a house.  Now they are able to build it much quicker due to the amount of available workforce.  It is only the permitting process that slows them up.  Another reason to buy if you can do it.

Monday Market Update for Frederick County – a look into the future

photo credit: sittered

We had a meeting last week with a notable Frederick County Appraiser, Wayne Six. He talked to us about his take on the current market conditions. He feels we are still a while away from any type of turn around. We have to have about eight to twelve months of a stable market before climbing out of the hole. A key thing about our market is, of course the inventory. He follows the inventory numbers religiously. He held up a chart very similar to the ones I have been sharing with you on previous market updates and similar to the one below.

Wayne feels our inventory number will continue to climb to about 2400 homes. I have to agree as we were close to this last year. We had a drop of inventory around the holidays and as I have predicted they would climb back up again once spring hit. You just can’t have that many homes and expect to sell them in a reasonable amount of time. I really believe sellers are starting to understand this too. They should only sell, if they are truly serious. With all the short sales and foreclosures riddling the landscape, it makes it hard for a not-so-serious seller to compete with the low prices.

Here’s picture of the inventory over the last couple years. Do you see a trend? I do, that’s why I still believe it will climb in the spring.

You can see the inventory numbers are cyclic, however the overall is continually climbing. You can see we lingered around 2300+ homes last year for most of summer.

Below are the Housing Statistics for the Month of February. This housing report is usually available around the 10th of every month from MRIS.

February 2008 Market Condition Report

One of the key numbers that sellers need to understand, the Average Sales Price as a percentage of Average Listing Price. The average list price is higher than last year 5.37% …Yipee, but wait the other number is about the same amount lower (89.28%) than last year. This is a case of “I need xxx dollars for my house” and getting below market value for the house and longer days on market. (HINT: Buyer’s don’t care what you want or need.) Homes are being listed too high. Some agents do this because the are afraid to tell the truth and essentially “buy” the listing. Listing too high causes the seller to play catch up with the market. Wayne Six says we have been depreciating about 1-1.5% a month on home values. But that all depends on the inventory…lower inventory numbers will yield a slower depreciation and of course a higher inventory will yield a higher depreciation. It really comes down to the absorption rate of the neighborhood. Sometimes you have to dig deeper than county numbers to see the real picture.

If you need someone to do that for your home, give me a call.