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

Wendy Rulnick — Sun, 12 Oct 2008 18:07:43 +0000

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