|
 It's a mixed bag this month. Inventory is at an all time high, but at least the amount that it has increased has slowed. No real comfort there, but I suppose it is better than nothing.
We have also seen a drop in the number of homes sold - not good.
At least we have also seen a decrease in the number of homes listed in August.
The average home price has also dropped when compared to the same time last year - but not by an amount worth getting worried about. Read on for all the details.
Supply And Demand
I suppose the "good" news would be that we are starting to see things flattening instead of just continuing to get hugely worse.
However, with sales as low as they are and inventory as high as it is, finding the silver lining is difficult.
To put all this into hard numbers, inventory was up 1.4% from August 2006. That boils down to 284 homes currently on the market. That is a whole lot of homes for a town the size of Morgan Hill.
Sales were down 31% from the same month last year, giving us a total of 29 homes sold.
Do a little math and that tells us that we currently have enough homes on the market to last 9.7 months. Ouch.
Looking at it another way, for every home that actually sells, there are almost 10 other homes trying to get the attention of that same sinble buyer. For sellers right now, that big challenge is getting that attention, and holding onto it. Can you say "Curb appeal"?
When we look at the same numbers over the last few months, we see the short term trends. That big dip in the middle is last winter. In these numbers, there is some good news. Note that last year, we saw a general increase in inventory from July to August. We did not see that this year. The total inventory between July and August 2007 actually went down .4%. That may not be much, but we normally see an increase between July and August. Whenever we see things that go against the norm, it's good to ask why.
In this case, it might just be the very first gentle signs that the market is generally flattening. If inventory trends continue downward - particularly when they would normally go up - that is a good sign that the overall market is adjusting and reducing the number of homes out there. This is a good thing.
The only other real insight here are the sales numbers. Look at what happened in June, July and August. Nearly totally flat. No summer boost that we would normally expect - even in a down market. It looks as though the summer "season" came and went in May.
Home Prices
 The average price a home sold for in August is down from the same time last year. In real numbers, that means that the average priced home in August 2007 sold for $947,032. This is down 1.5% from the same time last year.
Interestingly, the median is up, which means that higher priced homes made up more of the sold homes than in August of 2006.
The highest price a single family residential home sold for in August was $2,125,000.
The lowest price a single family residential home sold for in August was $415,000.
What do we learn from this? The short answer is that now is a good time to think about buying. Despite this being the summer season, we are not seeing the prices going up. No telling what future months will bring, but we can officially declare this season as the first we have seen in a long time that favors buyers - as far as price is concerned.
When we look at the trend across previous months, there is clearly some fluctuation, but the general trend down is definitely there. We did see prices do a mini-peak in May and drop immediately in June. We did then see some growth in July and August, but only in the price, not in the number of homes sold, which actually declined during that period.
With September being the end of the official season, it will be interesting to see what the numbers reveal. Note that last September 2006 was the best month we had since April 2006 - and perhaps longer.
Days To Sell
It's not a record we want to set, but set it we have. It took longer to sell a home in August 2007 than in any other August since before 1998.
In August of 2007 it took, on average, 148 days for a home to sell. Keep in mind that this is the number just for homes that SOLD. Further keep in mind that for every one that sold, there are about 9 others that did NOT sell.
At this point, there really is only one that that can get this market back into any kind of balance. We see that the inventory is at an all time high. It is taking longer than ever to even get close to selling your home. Prices must come down more.
That gives August of 2007 the longest days to sell of any month we have seen in over the last year. It has even managed to beat out December and January which are historically the worst times for days to sell. In fact, the next closest month is January 2007 with 114 days.
Trackback(0)
 |
TrackBack URI for this entry
Subscribe to this comment's feed