By now everyone has heard that 2011 is not a good year for real estate sales! It is not a good year for the
economy, the unemployment rate, or for consumer confidaence. New construction remains a dead industry the likes of which have not been seen since the Depression. Speaking of the Depression, recently I read that the rate of decline in home values is greater than during the Depression. Next month in July, we hit the 4 year anniversary of the bottom dropping out of the housing industry. Last week, on a business show I listen to on the radio, the normally optimistic and upbeat host gave voice to what I have thought too many times now, “It is getting hard to be optimistic anymore!”
Those who hold to negative predictions about our future seem emboldened to be all the more gloomy. I hear their narratives and they are reasonable in light of what is going on. Yes, it could happen and they very well could be right. If so, the current conditions should paralyze anyone. The news and information media picks up on these perspectives and we get showered with depressing forecasts and disheartening anecdotes. As if compulsory, the media then salts in stories which show good signs of recovery; perhaps to limit liability and relieve guilt for sending their readers to find the nearest bridge?
What is certain is what has already happened. A couple of weeks ago at our brokerage meeting we looked back to see where we are now by comparison with the past. To illustrate, we used Yamhill County for our study. Since 2007 the sold volume/number of homes sold has dropped 37% (from 1258 in 2007 to 796 year-to-date). The dollar value of those properties dropped 52% (from $354 million to $175 million). The average sale price is down 23% and the median price is down 22%. The short sale/foreclosure industry was almost unknown to most people and Realtors®; today it is the dominant force driving values affecting all of us.
- Inventory is down. It is difficult to find many new homes anymore and the ‘glut’ of homes to sell is down to less than a 7 month supply from a high of a 20 month supply following the financial sector meltdown of 2008 (6 month’s supply is considered in the range of healthy). This helps to stabilize pricing and balances the marketplace from being a completely one-sided buyers’ market. Although a good number, it likely reflects the public’s unwillingness to sell if they do not need to. Also parallel to the unemployment industry, it likely reflects discouraged sellers who have quit trying.
- Closed sales are the second lowest (YTD) of the last 5 years but seem to be following the normal seasonal cycle up.
- Pending sales are complicated: Pending sales are up by comparison with one year ago because the $8,000 tax credit expired on April 30th 2010 and there was a great push to submit all offers before that deadline. That made May of last year a dead month for accepted offers (pending sales). By comparison, we ‘look’ good this year.
- Market time for a sale remains consistently high averaging over 140 days.
- The average sales price is at the same level as it was in late 2004.
If you need to sell, we just need to find one willing buyer for your property. Last month 84 residential properties did sell in Yamhill County. Yours could be one of those. If you need to buy, the task is easier but it still must be accomplished with caution and foresight. Your needs and our job have not changed because of a different kind of a market, it is just a greater challenge.
Randy McCreith, Bella Casa Real Estate Group503-310-9147 Cell [email protected] www.TheBellaCasaGroup.com Tax Credit Incentives Market Information Bella Casa Blog The Marshall Building 207 NE 19th Street, Suite 100 McMinnville OR 97128 866-281-6653 Fax
Buy. Sell. Be Happy.