Real Estate by the Numbers: January – August 2009
Previously, this information has been difficult for the public to obtain. John Erskine, an American educator, once said that “Opinion is that exercise of the human will which helps us to make a decision without information”. As Realtors, we would much prefer to have our customers make buying and selling decisions after being fully educated and informed.
To that end, the following information is being offered for your review.
In this post, we will focus on several important market benchmarks including the number of homes closed year to date, average selling price as well as the days on the market prior to selling.
Graphs accompany much of the information which provide a month by month comparison of the data compared to the same period last year.
Although our residential real estate market generally does not exhibit the extreme peaks and valleys associated with markets in many metropolitan areas, the Troup County market has been significantly impacted by the ongoing economic downturn which was precipitated by the sub-prime mortgage crisis affecting all financial markets.
Most experts agree that the downturn began in 2006 and accelerated through 2007 and 2008. Some believe that the residential market is now beginning to bottom out in most areas. The rebound is being led by starter homes and bank repossessions. We are hopeful that the rebound will continue to trickle up the market spectrum in future months.
Let’s take a look at the following graph for closed sales from January 1st through the end of August.
For every month this year, the number of homes sold has been 25-30% below the sales for the same period in 2008. It is significant to note that for the past three months of June, July & August the number of sales has trailed the past year by 22%, 26% and by 25%, respectively.
Overall, 480 homes sold in Troup County from January to August last year vs. only 360 for the same period in 2009. That’s a 25% reduction in the number of sales.
The sale of homes below $150,000 has dominated the market this year. Of the 360 sales, over 70% have been below $150,000. The resurgence of the market at levels above this has yet to occur.
So we’ve seen a significant drop in the number of closed sales. How has this phenomenon affected home prices? It is difficult to say exactly how much the reduction in home selling prices has been.
One indicator is average sales prices which are depicted on the following graph. The average sales prices are not a true picture of the drop in sales prices for the market because the average represents both a drop in prices as well as a manifestation of market sales currently being heavily weighted towards the lower end of the price range spectrum.
Over the past 24 months, average sales prices have dropped from $133,000 to $123,900 or, 6.8%.
We will provide additional information and updated data in future blogs. If you have any questions or comments, please give us a call.