May Market Update
A lot of records were broken in May. However, most were negative and there is a good chance they will be broken again and soon.
First, and the worst, May closings for all single family decreased 28.5% or the largest percentage decline in our records dating back to 1994. The next two largest declines on record are April 2007 and March 2007, so the top three largest year-to-year percentage decreases over the past 13 years have been the last three reporting periods.
The breakdown for the single family decline had single family detached dropping 29.2% and condos and townhomes dropping 24.5%. There were 5,045 single family detached closings in May versus 7,122 for May 2006 and there were 907 condo and townhome closings in May versus 1,201 for May 2006.
Even when all lags are reported, the decline will be the largest on record. Unfortunately, there is a good chance that it could be broken again in June, as June 2006 was our all-time high closings month on record.
The average sale price for all single family in May was $264,487. This surpassed July 2006’s $263,087, so an alltime high was achieved.
How can an all-time record high for the average sales price be in the same period for an all-time percentage decline in closings? Below is a chart showing the number of million dollar plus closings for the month of May for the last three years. Even though May 2007 was down 29% from May 2006 for all closings, the number of million dollar plus closings were up. Not only were they up on closings by 2, but the 97 closings were over 9% of May’s volume.
May 2005 2006 2007
Million $+ Closings 50 95 97
% of All Closings 0.69% 1.14% 1.63%
Million $+ Volume 77,008,469 150,045,490 143,621,385
% of All Volume 4.36% 7.02% 9.12%
The average price went up because the high-end market has not dropped off like the rest of the market. May might have been our largest percentage decline on record, but if you’re an agent in the high-end you might still be doing well in this market.
There were 4,943 expired listings for all single family versus 3,760 expired listings for the same year ago period.
There were 2,983 withdrawn listing in May for all single family, and for the 3rd consecutive period we have broken the all-time record for withdrawn listings. There have been more single family withdrawn listings through May 2007 than there were for all 2001.
Months-supply for all single family went over double digits at the end of May. There were 10.5 months-supply at the end of May, and the end of June will probably be even higher.
I still believe we will hit “bottom” this summer. However, interest rates have shot up this week to 2002 levels. If the FED does not drop rates soon, our housing recession will go on longer.
Thank you,
Steve Palm
Smart Numbers
© 2007 Smart Numbers
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