August Market Update
We got our rate cut this week! We HAD to have this reduction, but will it be enough to turn our housing market around? I believe there will be one or two more interest rate reductions before the end of the year. They will be needed after looking at August 2007 results.
There were 5,129 closings for all single family in August. This is a decline of 34.6% from the same year ago period. After lagged closings are reported, the percentage decline will most likely be more than 20% and the largest percentage decline on record (since 1996).
Single family detached closed 4,343 units in August or a decline of 34.6% from the same year ago period. This was the 6th consecutive percentage decline and 12 out of the last 13 periods have produced a negative year-to-year percentage change.Condos and Townhomes closed 785 units or a decline of 33.7% from August 2006. This was the 6th consecutivepercentage decline and the 9th percentage decline over the past 12 monthly periods.
The average sale price for single family detached closings in August was $278,871 versus $264,510 for the same year ago period. Condos and townhomes had an average price of $193,009 versus $186,557 for August 2006.
There were 7,181 expired listings in August. This was 19 more than Last December’s all-time record and 2,100 more than August 2006.
There are 36,894 expired listings for single family detached for year-to-date August 2007. There are 10,000+ more expired listings than were reported for the first eight months of 2006 and more expired listings than were reported for all of 2002.
Single family detached and condos & townhomes broke the record in August for most withdrawn listings for a given period. Single family detached had 3,196 withdrawn listings in August and easily surpassed the previous record of 2,920 withdrawn listings in June 2007. Condos and townhomes had 546 withdrawn listings in August and also easily surpassed the previous record of 495 withdrawn listings in June 2007.
Days on market and months supply continue to increase. Days on market for all single family is averaging 86.2 through year-to-date 2007. This is the highest average for the past 13 years and it is expected to go only higher.
Days on market for year-to-date 2007 for condos and townhomes is 95.0 and is the highest yearly average since records have been kept. The previous high was last year’s 91.0.
Months supply is at an all-time high and below is a three year August trend:
Months Supply 08/31/2005 08/31/2006 08/31/2007 % Change 06′
New - Single Family Detached 7.5 10 13.8 38.0%
New - Condos & Townhomes 7.5 8.4 13.7 63.1%
Resale - Single Family Detached 6.6 7.4 10.8 45.9%
Resale - Condos & Townhomes 10.5 9.5 11.4 20.0%
The rate cut was indeed very good for our housing market. However, more is needed and consumer sentiment needs to improve and soon. I believe 3rd quarter will be our bottom and then our slow turn for improvement willbegin in the 4th quarter.
Thank you,
Steve Palm
Smart Numbers
© 2007 Smart Numbers
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