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02/03/2008: "Home Marketing Time at 12 Month High"
You may notice a slight change in the December, 2007 numbers. My flash drive was destroyed (Wal-Mart parking lot in Mt. Vernon, IL â€" Don't ask.) and I had to re-do all of my numbers. I did find some errors in last years numbers.
Sale prices for Clayton, Henry and Fayette Counties, Georgia for January 2008 was mixed. We had expected this, but had hoped for better. Fayette County was down a gnat's breath, Clayton County was down a bit, and Henry County was up a bit. It seems there is no stabilization yet and certainly no start of a recovery.
| Dec 2006 - Jan 2008 Mean Sale Prices |
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We did note there was over a 23 month supply of houses on the market in the tri-county area in January 2008, and a 25 month supply of condos and town homes. This does not include most new homes in developments marketed by builders not a member of MLS. So, the supply is actually much greater.
The lots and land category of GaMLS, which includes both residential lots and some acreage tracts had a 67 month supply... this is over a 5 year supply! In the tri-counties, only 14 lots and land listings sold in January 2008.
SFR marketing time in January 2008 was higher for all three counties than at any time during 2007 and significantly higher than in January 2007. In Clayton County it took 111 days to get a reasonably priced home under contract. In Henry County: 119 days, and in Fayette County: 130 days. The marketing time stated is only for homes that actually sold. A home priced unreasonably high can sit on the market forever. If your home has been on the market for a considerably longer period you really should reconsider your pricing strategy.
Today, we heard through the grapevine (almost the root) that one large Atlanta area home builder which was closing over 50 home sales per month this time last year was now closing less than 5 per month, with a huge inventory sitting.
Even though the market is way off, we had good activity in January. We had more calls from prospective purchasers of homes, multi-family, and commercial properties in January than we had in any one of the past several months. Maybe it has something to do with it being a new year.
Getting financing for marginal purchasers right now is a lot like pulling teeth, but it can be done. Marginal buyers or buyers with special circumstances must plan on putting in extra effort providing verification of absolutely everything. Such buyers are likely to get wore out before they get the job done, so it is important to encourage them and stay behind them or they will give up.
I had a conversation with a real estate appraiser this week who specializes in appraisals for home loans. He said his business had really increased over the past month (a month ago he was worried about being forced to shut down)... but not due to increased market activity. Instead, he claims so many appraisers have gotten out of the business in his area that those remaining are getting busier.
We also understand that real estate agents are dropping like flies. It is relatively easy to sell real estate when the market is expanding. But when the market is contracting marginal agents find something else to put food on their table.
Hidden in all of the bad news is the silver lining. Loans made today are better underwritten than they had been in recent years, hopefully preventing the market from going through this mess again for a couple of decades. (Remember the S&L Crisis of the 1980's? Blamed on appraisers but really the fault of loan underwriting policies.)
Buyers are able to easily find great deals right now (as compared to prior market highs). Not good news for sellers, but great news for buyers who can anticipate a windfall a few years down the road.
Like we have said time and time again, if you have ever thought about buying a house NOW is the time to do it! If you are waiting on the market to hit bottom before you buy you may miss it. We can not know we have hit bottom until it has already passed, then it is too late to take advantage of these low-low prices!
