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2007 has been a difficult year for everyone: home buyers,
home sellers, real estate agents and mortgage professionals.
The markets have had to weather a lot of bad news: rising
energy prices, subprime mortgage failures and drastically increasing foreclosure
rates. The negative market events were tempered somewhat by an otherwise
healthy economy and interest rates that stayed low. At year end interest rates were
around 6.25% for 30 year fixed rates.
Uncertainty was the theme for the markets in 2007. No one
was really sure which way the markets would go and many buyers just sat and
waited to see what would happen. Prices dropped and interest rates came down
which reinforced the wait and see attitude. Everyone except sellers is waiting
for the bottom of this market.
The nice thing about looking back at the market for the year
is that you get a very good picture of what has happened. Normally we look at
month over month performance and this tends to be a little erratic and harder
to see how the market is behaving in any particular month. But the yearly
numbers demonstrate some very clear trends.
I provide 3 key graphs below that I think give a good
picture of our local market.
Market Notables
- Single family home sales in 2007 were down 6.5% from 2006
- The average price of homes sold in 2007 was $374,682 Down 1.9% from last year ($381,867).
- The average price per square foot of a home sold 2007 was
$166/sf . Down ~5.7%
from a year ago ($176).
- The average number of days it took to sell a home
in 2007 was 154 days. 12.4%
longer than in 2006.
- The average number of homes on
the market in any moth in 2007 was 800 homes. This is about 4.2% more than
in 2006
The key points here, and they should not be surprising to
anyone, are that demand for homes has dropped off by approximately 6% and
prices have dropped about the same but it is taking a lot longer to sell those
homes. Sellers should plan on 5 to 6 months to sell a home in this market.
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