October Market Update
There is actually a glimmer of good news to report this month. There were 4,185 closings for all single family in October. This was another large year-to-year decrease, 31.0%, but after lags are reported October may exceed September’s result.
Historically, Octobers’ closings have always been less than September. It will be close, but still a good chance it will happen, as only a few hundred lags will be needed to surpass September.
Another good sign to report is that 4,970 single-family homes went under contract in October versus 4,399 in September. If the ratios hold out there should also be more closings in November than in October.
Why is our market starting to turn around? First, the FED dropped interest rates a half a point in September and now a quarter of a point the end of October. Second, our prices are dropping and in some areas are dropping a lot.
The average price for condos and townhomes was $183,735 in October or a decline of 4.2% from October 2006. It is also the lowest reported average price for condos and townhomes since July 2005.
The average price for single family detached was $248,333 in October or a decline of 0.3% from the same year ago period. This was also the lowest average price reported since February 2006.
There were 1,134 expired listings for condos and townhomes in October. This is the third highest monthly total of all time and when you add September’s record number to it you would exceed the total for all of the year 2000.
There were 6,436 expired listings for single family detached in October. This was just short of being a record, as it was only 120 less than September’s all time record. I believe we will still see more records broken for expired listings before 2007 is over.
There were 3,369 withdrawn listings for all single family and ranks only behind August as the highest reported for a month.
The days-on-market for all single family was 90.8 in October. This is the highest reported DOM since February 1998.
Plus, the average year to date DOM for 2007 is 87.0 and if this does not go down by year-end it will be the highest yearly average since 1994!
The inventory levels are not dropping in the Fall as in the past, as the record number of foreclosures keeps being added to the inventory. This is a large part of our lower prices, but at the same time are helping fuel our minor comeback, because they are being absorbed at a greater rate than the rest of the market. I believe there is a whole lot more foreclosures to still hit our housing market.
There are a couple encouraging signs in October and I would normally be optimistic that we would be starting our turnaround. However, the equity markets have weakened again, gasoline is soaring, and the credit markets are unstable. We will need a few more months of positive numbers before a definitive positive outlook can be projected.
If we can stay out of recession, I believe 2008 will definitely improve.
Thank you,
Steve Palm
Smart Numbers
© 2007 Smart Numbers
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