Bob’s January Newsletter
2008!
Well, it’s a New Year, time for some reflections, resolutions and predictions.
Reflections – People think that Real Estate went down the tube in 2007.
Main Resolution – I’m going to work harder so I can pay my Christmas bills.
Predictions – Green Bay Packers win the Super Bowl.
OK – Let’s look at Real Estate.
All the numbers for the year are out, and I crunched a lot of data to keep my own knowledge of the industry current. I won’t bore you with a whole lot of statistics but here are a few broad facts you might find interesting about our local market.
The numbers from the Southwestern Illinois Regional MLS:
- The number of properties sold in 2007 was down by 9% compared to 2006. (4867 in 2007 compared to 5367 sold in 2006.)
- The number of properties on the market at the end of 2007 was 84% higher than at the end of 2006. (3205 at the end of 2007 compared to 1742 at the end of 2006.)
- The absorption rate, the number of months needed to sell the properties on the market at the current sale rate, was 5 months higher at the end of 2007 than 2006. (10 months supply at the end of 2007 compared to 5 months at the end of 2006.)
- For the eight largest Real Estate companies in Edwardsville/Glen Carbon, the number of properties sold in 2007 was down by 13% compared to 2006. (2276 in 2007 compared to 2548 in 2006.)
- For Prudential One Realty Centre, the number of properties sold in 2007 was up by 4% compared to 2006. (529 in 2007 compared to 509 in 2006.)
Some of my own observations:
First, I do have to note that Prudential One Realty Centre was the only local office that realized a gain in the number of sales (and total sales volume) in 2007 compared to 2006. Our clients had a good year!
Second, this is obviously a buyer’s market. There are just a lot of quality properties on the market to choose from. Our market is not glutted with foreclosures or homes in need of extensive repairs. To the contrary, owners have primed their properties for sale because of the competition.
This is not a stagnate market. While the number of sales is down from last year, there are still a whole lot of transactions going on. At Prudential One Realty Centre, we just finished our busiest year ever. There are a lot of active buyers in the market, but also a pent up number of potential sellers.
Which brings us to prices. There are no sound statistics on the comparative prices of particular homes that sold. Every home is different. The same home would have to sell again and again, with no changes to the home itself, to get reliable data. But prices, on average (there’s the problem again) are down compared to last year because of the local supply and demand, and more importantly, because of general perceptions. To hazard a guess based upon my own observations, I would say that prices are down by about the same percentage as sales – about 9% compared to last year. I also think the long period of past steady appreciation in our home values has been about 6 to 7% per year. In the long view, of course, home prices have appreciated nicely.
So, let me “pump a little sunshine” without making any predictions. This is a great time to buy a home. There are many choices available, interest rates are very low, and prices are down. Beware, though, that the market activity is still high, so buyers have competition. Remember, the buyer’s marker is over just as soon as someone buys the home you wanted!
For sellers, it may still be viewed as a great time. Prices are relative if you are staying in the market with another purchase. It is a good time to trade up if that is in your future. For sellers, this is a time when you need a really good Realtor. Lots of homes are selling well, but many are not. Professional representation for successful marketing is often the difference.
I hope this little snapshot of the year was interesting to you. Please contact me, of course, if you want to talk Real Estate. I would appreciate it if you would give my name to anyone you know thinking about buying or selling their home. And let me know. I’ll treat them like royalty, and won’t let you down.
Thanks, and have a great year!
Bob