Tuesday, March 10, 2009

What is happening in today's Real Estate market?

I've seen many changes in the market over the past 30+ years but more changes have occurred in the past two years than in any prior two year period that I can remember. Two years ago housing prices were approaching an all time high rate of inflation and buyers were were still lining up at the door when new listings hit the market. As we all know, this is not the case today. Many of you are interested in actual numbers since the numbers are what will have an effect on you if you are buying or selling in today's market. We are definitely working in uncharted waters.

The following information is taken from data compiled by the Richmond Association of Realtors for the calendar year ending December 31, 2008:

The average price of a home sold in the CVR MLS in 2008 was $264,467. Average home prices in the region were comparable to the Hampton Roads, Fredericksburg and, after major price declines, the Prince William markets but less than the other major markets of Northern Virginia, Charlottesville and Williamsburg. Nearly three-quarters of homes sold in the CVR MLS had a sold price below $300,000. Only seven percent of homes in the CVR MLS sold for $500,000 or more in 2008.

In the CVR MLS, home prices were down just three percent from the 2007 average of $273,032. Prices were down three percent in both the Richmond Metro and Tri Cities Areas. Some local markets experienced flat prices or even slight increases in 2008. For example, average prices were up one percent in the city of Petersburg, while prices were flat in the city of Hopewell and down just one percent in the city of Colonial Heights and Dinwiddie County.

As you can see from this information, through the year 2008, our market has not been hit as hard as other the areas of the country that we hear about and see in our daily news broadcasts. But it will be interesting to see what the first quarter numbers of 2009 will be. My guess based on what I am seeing is that the numbers will have declined appreciably from the 2008 first quarter numbers related to the price of homes.

Pricing a home in today's market is more difficult than you can imagine. We don't have a large number of comparable sales to use and if the comparable sale is over 30 days old, it is probably out of date. For the first time that I can remember we are using active listings to aid us in pricing a home to sell. Pricing is affected by the decline in consumer confidence and the resulting slow down in the number of sales. The bright spot is that we are seeing more first time home buyers because of more affordable pricing and because of the newly passed tax credits available to these buyers.

If you know of any first time home buyers, please let me know and I'll be happy to share the benefits that they have with this program. And after they have discovered this new resource for assisting them in buying their first home, I'll be delighted to help them find that new home!

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