In-Depth Analysis
March 2008
Market-at-a-Glance
The Market-at-a-Glance section contains an
overall summary of the trends described in our detailed articles.
A recap of the current market indicators are as follows:
1.
Resale Listings – 57,305
a. The February listing count climbed
again after the typical fall off in the final two months of 2007. The increase
from January to February was 431 (.8%).
The trend of this metric shows that listings have been increasing for
the past 32 months. The February
increase fits the normal calendar cycle.
2.
Resale Sales – 3,445 - 2,907
a. Resale sales volume is down from this
month in 2007 by 1,502.
b. Resale sales volume is down 2,448
sales from this month in 2006.
c. Resale sales volume is down 4,336
from this month in 2005 (the 2005 figure was very inflated by speculator
activity).
d. Resale sales volume is down 2,751
from this month in 2004 (the 2004 figure was very inflated by speculator
activity).
e.
Resale sales volume is down
2,048 from this month in 2003.
f.
Resale sales volume is
down 958 from this month in 2002.
g.
Resale sales volume is
down 1,164 from this month in 2001.
3.
Resale Sales Price - $213,400
a. The median January sales price is down
by $6,600 from January 2008.
b.
The median sales price
has declined $41,600 in the last five months.
c.
The median sales price is
$46,600 below the September 2005 level.
d.
The appreciation rate for
the last twenty-eight months (September 2005 to present) is a negative 7.4% on
an annualized basis.
4.
New Home Market
a. The number of New Home specs in February
decreased by 86 from the January count to 3,628. The record level was in October 2006 at 4,692. Prior to February 2006 the record was 2,400
homes.
b.
The number of new home
subdivisions selling declined for the third straight month; down by 14 to 1,082 (the largest number ever
recorded prior to 2006 was 813 in May 2003).
The spec inventory remains far above norm. That level is currently nearly double the
level that has historically been healthy for our market. What will it take to get the inventory level
back into a normal range for our market?
Sales have now been below the 2002
level for eleven months. I believe that a
major portion of the drop in sales through August from the 2002 level can be attributed to three
factors:
1. Potential buyers waiting to be
able to sell their homes
2. Buyers concern about the
magnitude and timing of the market price correction
3. Tightening in mortgage
qualification criteria.
Much of the driver for the major
drop from September to present can be attributed to lack of consumer
confidence.
This is not true of the drop from 2004
- 2006 which can be almost totally attributed to drastically reduced speculator
buying.
The general press is reporting
housing market information that is six to nine months old. The In-Depth
Analysis Newsletter provides current information that
you need to serve your buyers and sellers and to help them understand what is
happening in today’s market.
Side Note
I personally believe the quantity of New Home specs we are
reporting is only about one half of the true number – making the actual count 6,000
- 7,000. Because of this huge quantity
of specs and the fact that many of these are completed or very near completion,
the typical pattern of the resale market leading the new home market has disappeared. Since completed specs and resale homes appeal
to much of the same buying public, parts of the two markets have, in essence,
become one market (excluding the geographic factor). In my opinion the spec market is actually
leading the resale market in the pricing arena because builders have the
ability to make price changes much more rapidly (and are doing so) than the
resale market as a whole. This
supposition leads me to the belief that sales volume in the new home market
will recover sooner than the resale market.