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2008 is off to a very weak start this year with home sales
down 33% compared to 2007. I could take a guess and say that the economic news
has been turbulent and the weather this winter has not been very conducive to
home buyers.
There are some positive signs in the market data.
First, prices are not dropping as fast as they were last
year. This year, the cost per square foot of a home dropped only 1.8% from a
year ago. In 2007 they had dropped 8%.
Second, the average price of a home sold has been very
stable over the last 5 months and shows a slight upward trend. (as my readers
know, I am not a fan of using the average sales price of homes to see trends in
home prices, I think it is better to use price per square foot) But this trend
does show a pattern of stability and consistency.
The other positive sign I have noticed is the increase in
buyer activity that started at the end of February. Not only did the number of
showings of homes go up, but the number of offers on homes increased as well.
Why the increase in buyer activity? First, I think that we
have been inundated with bad news over the past 18 months and buyers are now
acclimated to the new market reality. Second, many buyers have put off a move
for a long time as the real estate market took its fall. I think buyers are
just plain ready to move and feel the time is right to buy a home. This brings
me to the third point.
Prices are down and there are many affordable homes on the
market. Home buying is now an enjoyable experience. There are a lot of nice
homes to look at, there is time to really look at the homes and decide where to
live, and the process is much more relaxed.
I am very anxious to see how the market behaves over the
next 2 months, hopefully the snow will all be gone!
Market Notables
- Single family home sales through February 2008 are down 33% from 2007
- The average price of homes sold in February 2008 was
$351,626 Up 2.4% from last year ($343,138).
- The average price per square foot of a home sold in
February 2008 was $159/sf . Down
~1.8% from a year ago ($162).
- The average number of days it took to sell a home
in February was 191 days. 25%
longer than last year.
- The number of homes on the
market in February was 635 homes. This is about 9% fewer than in 2007
The key points, and they should not be surprising to anyone,
are that demand for homes has dropped off significantly this winter and prices continue
to fall. However price declines are not as dramatic as last year. Sellers should plan on 5 to 6 months to sell
a home in this market and must review the pricing frequently to ensure they are
competitive.
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