Alan Greenspan on the Housing Market – I Don’t Agree

Yesterday I was riding the bike at Gold’s Gym in Destin FL. One of my sellers, whom I originally met there, popped onto the bike next to me.  He said, “Alan Greenspan says the housing market will recover by mid-2009, what do you think?” Greenspan pointed out that there has been a “slower rate of decline” in U.S.  housing prices of late. I thought I had noticed the same thing in my Emerald Coast real estate market, here in Northwest Florida. Until the last 30 days, that is.  During that time, I think prices have been declining even more steeply.  I have been reducing my listing prices by several thousands of dollars, way beyond the norm. Certainly, I have seen some of my listings sell, but far too many have not attracted offers.  Based on my intense examination and intuition regarding pricing, it is surprising, if not stunning.  My observations are anecdotal, but here are statistics from the Emerald Coast Association of Realtors.

Sales and Inventory Report
Category – Combined Residential
Statistics for Entire MLS from 11/1/2007 – 10/31/2008
Month Year Monthly
Sales
Avg List $ Avg Sale $ Avg $/Sqft Median Sold $ Avg DOM % Sold/List Current
Inventory
Months
Inventory
November 2007 416 $366,350 $337,422 $190 $225,000 210 92.10% 12928 31.07
December 2007 438 $357,465 $332,160 $206 $240,042 240 92.92% 12681 28.95
January 2008 385 $378,386 $357,163 $224 $250,000 228 94.39% 11863 30.81
February 2008 505 $374,582 $351,138 $233 $259,900 208 93.74% 11723 23.21
March 2008 536 $379,554 $359,452 $229 $245,000 199 94.70% 11686 21.80
April 2008 461 $400,340 $362,789 $199 $236,000 199 90.62% 11509 24.96
May 2008 489 $409,191 $374,629 $197 $249,700 188 91.55% 11436 23.38
June 2008 497 $407,679 $374,634 $196 $229,000 178 91.89% 11253 22.64
July 2008 453 $348,534 $320,267 $169 $225,000 167 91.88% 10881 24.01
August 2008 412 $356,089 $324,816 $166 $220,000 181 91.21% 10574 25.66
September 2008 379 $321,708 $294,281 $158 $199,000 186 91.47% 10331 27.25
October 2008 75 $479,805 $427,512 $205 $215,000 218 89.10% 9960 132.80
Annual: 5046 $375,947 $347,302 $199 $233,900 198 92.38% 11402 27.11
Annual: 2007 – 2008 5046 $375,947 $347,302 $199 $233,900 198 92.38% 11402 27.11

Note: The “Current Inventory” column(s) reflect the number of active(on market) listings on the 15th day of each month.
The “Months Inventory” column(s) value(s) equal “Current Inventory” divided by “Monthly Sales”.
This reflects how many months it would take to sell out of inventory at the current month’s rate of sale.

Note how the “Months Inventory” statistic has climbed again in September, when it had been gently teetering between 23-25 months since February 2008.  Now it’s at its highest level, 27 months, since then.  I have to attribute it to the tightening credit market.

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