Welcome back!
Well, the elections are over, the economy is still a mess, and you want to know what’s going on in the housing market. I don’t blame you. If you read last month’s market report, you’ll remember that sales were up both from the year before and the month before. Since those numbers were from September it was hard to tell what people’s reactions were going to be regarding the stock market shake-up in September. Now the numbers are starting to come in. Let’s take a look.
As usual, I will be comparing this month’s numbers (October 2008) with those from last year (October 2007) and last month (September 2008). Even though it is November, we won’t have November’s numbers until the month is completed.
Home Sales Volume and Home Sales Units
Home Sales Volume and Home Sales Units both decreased this month. While a decrease during this time of year is normal, we had been increasing, so I would be more likely to attribute the decline to the instability of the economy and stock market during the month of September. Home Sales Volume decreased 18.78% over last year and decreased a full 8% from the month before. Home Sales Units, which have been on the rise, actually fell this month, marking a 12% decrease from last month and a 7% decrease from last year.
Slower sales are not necessarily an indication of troubled times unless they accompany a static or increasing supply. In this case, that is exactly what we’re looking at. It is hard to predict whether this is a temporary setback due to the stock market turmoil or whether people are still so uncertain that they are backing off from buying, possibly sparking another round of market value drops.
Median and Average Sales Prices
Our Median Sales Price remained almost exactly the same as last month, coming in at $180,000. Interestingly, the average sales price increased by 4.36% ending up at $226,435. That is interesting to me because our average sales price has been low over the past few months due to so many short sales and foreclosures being sold. This increase indicates that properties in a higher bracket were sold in October, especially since this number rose even as the home sales units decreased. This begs the question, “Was it just the investors who slowed their buying during the stock market turmoil?” The next month or two will be important to watch to make an educated guess on that question.
Pending Contracts
Pending Contracts dropped nearly 10% this month compared to last month’s number and compared to last year, we have a whopping 24% decrease. That is really not good news, especially since the active livstings have incresed slightly. If this continues, it is going to be a bumpy ride ahead.
Active Listings and New Listings
We saw a less than 1% decrease in new listings this month and a 1.65% increase in Active Listings. Active listings are at 7,988 at this point. Considering that the Pending and Sold numbers dropped fairly radically, it is amazing that our active listings number did not go through the roof. However, I see that as an indication that as listings expire, their owners are realistic about whether they will sell in this market and are not all rushing to put them back on the market. Going forward, if sales continue to flag, we will need the active listings to decrease rapidly in order for the market to be “even” or at least where it is now. If they remain static, then we will continue to have excess inventory and prices may decrease.
Factors Affecting Housing
Keep in mind that this is a general Tucson Market Report. Some areas are worse off than others and some areas are maintaining their stability for the most part. It is important to look at the big picture, but if you are thinking about buying in one area of town, talk to your Realtor to find out the specifics regarding that particular neighborhood.
Fannie Mae and Freddie Mac just announced that they are putting a hold on foreclosures from November 26, 2008 through January 9, 2009. This affects only those loans insured by these two companies and those loan holders who have mortgages that may be able to be resolved in ways other than a foreclosure will be contacted by the bank or an attorney for Fannie/Freddie. This should begin happening around 12/15/08.
If this action results in large numbers of people being able to keep their homes, it will benefit us in two major ways: (1) Fewer homes will be flooding the market, helping values to remain stable. (2) If homeowners are able to lower their home payments, they will be doing better financially and will be able to spend money more normally, thereby stimulating the economy. There will still be plenty of foreclosures and short sales, but they will be the homeowners who truly can’t be helped any other way. I am hopeful that if this all works as planned, it could also decrease wait times for short sales to be approved because of lighter file loads at the banks.
My Experience
I am seeing buyers coming out more and more. I have several listings under contract, although the majority of them are short sales, which means that they won’t close for another month or so. I will be looking eagerly at the numbers next month to see if everyone else is experiencing an increase as well.
1 response so far ↓
1 Stacey Derbinshire // Nov 22, 2008 at 7:45 pm
I discovered your homepage by coincidence.
Very interesting posts and well written.
I will put your site on my blogroll.
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