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01/07/2008: "South Metro Sale Prices Increase in December"
In December of 2007, Clayton, Fayette and Henry Counties all saw a small to modest increase in sales prices although they finished considerably down as compared to the average sales price in December 2006.
| In December 2006, only Fayette County saw an increase over November 2006, while Clayton was slightly down and Henry moderately down. So, does the better performance of December vs. November 2007 over December vs. November 2006 mean the market is beginning to turn around? The simple answer is no. One month is not enough to establish a trend. The mumblings and grumblings we hear among surveyors and other pre-sale/pre-development contractors and professionals indicates their business has not increased. These service providers will see an increase in business well before the market recognizes an increase in new construction. |  |
Logic would dictate the resell market would show considerable recovery before the development of new subdivisions surges. So, those whose business depends on new development can expect business to remain slow for quite some time after a recovery begins, which I feel to still be some time off.
Resells remain slow and some buyer agents are complaining their clients are running them ragged trying to steal properties which are already bargain priced. A broker with a competing company complained today that it seems is standard practice for buyers to make offers at 80% of the list price and if not accepted move on to the next property. Of course, these are the extreme cases... not the typical.
It seems that an increasing number of sellers are taking undo advantage of their lender's willingness to accept short-sales. These sellers see short-sales as an easy way out of a situation which for them is uncomfortable but not unbearable. This is not unexpected as there is always some abuse of any system designed to help the most needy.
I understand there are about 2,000,000 sub-prime loans due to reset in 2008. Some of the experts are predicting over 15% (about 300,000) of these loans will go into default, but some will not actually be foreclosed on. When the foreclosures begin to dry up the market will begin to recover, but it should stabilize sooner. Stabilization does not mean that prices will go up, it simply means they will quit dropping.
I still feel that we will see things begin to level out in late spring of 2008 with a recovery beginning in earnest in the first half of 2009. But my my foresight is blurry. As the future progresses into the past my vision will become much better, so my opinion may change.
Sensationalized headlines are not helping. One headline recently read "Foreclosure Filings Up 68% in November", giving the casual reader the impression they had all of a sudden surged 68%. In the body of the article you find the truth which is foreclosures were up 68% for the month of November as compared to the month of November last year. The article further states the number of foreclosures had actually fell 10% in November as compared to October.
There are two huge positives in the middle of all of this. First, if you are planning on buying NOW is the time to do it. It is a buyers market. If you want a great deal do not wait for the market to recover, the best deals will be gone by then.
The other positive aspect is that if you have been considering remodeling your existing home or building a new one, sub-contractors are begging for work and material prices are dropping. Now is the perfect time to start your project.
