Things continue to look less than grand from a national viewpoint. A ray of light in NM? Isolated regions and some local markets, Silver City New Mexico included, seem to be bucking the huge continued downward real estate trends seen elsewhere.
OK here is 11-2008 from the NAR:
INVENTORY: Total housing inventory at the end of November rose 0.1 percent to 4.2 million existing homes available for sale, which represents an 11.2-month supply at the current sales pace, up from a 10.3-month supply in October
PRICES: The national median existing-home price for all housing types was $181,300 in November, down 13.2 percent from November 2007 when the median was $208,800. There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices; the median is where half of the homes sold for more and half sold for less
SINGLE FAMILY HOME SALES: fell 8.0 percent to a seasonally adjusted annual rate of 4.02 million in November from a level of 4.37 million in October, and are 8.8 percent below a 4.41 million-unit pace a year ago. The median existing single-family home price was $180,800 in November, down 12.8 percent from November 2007.
Prices nationally should continue to slide, and buyers in many markets are starting to get the heat. Interest rates heading towards snail butt bottom. What a great time to be qualified to buy. First Time Home Buyers delight too with FHA and 3.5% down - gifted down allowed from family member...
I predict that prices will find a way of sliding a bit more here in Silver before we see a firm bottom. Buyers are getting some nice deals here it seems, with virtually no sellers getting full asking price. That last sentence will probably provide momentum and reason for sellers to continue to ask higher prices than what conditions imply BUT please read the following....
DO NOT OVER PRICE YOUR LISTING! The price it gigh just in case and "WE CAN ALWAYS TAKE LESS" theory has about run its course - cause it isn't getting the wished for result. Look at the listings that are stubbornly kept on the market at a price that barely gets the properties shown. Duh! Days on market is a stat that most savvy buyers look at.
I have long thought we (as sellers) have had an overinflated sense of value in listing properties in this community, and therefore potentially the market could be a bit unstable. In spite of all of the negatives that might warn of the worst scenarios, the market has been managing to hold up very well with only occasional use of smoke and mirrors (s+m) adding to a sense of stability.
S+M The market has been sustainable at least in part because of the high percentage of sales made to folks coming from outside this area. To many folks who choose to make this their area their homes, our asking home prices must seem reasonable (if not darn cheap) compared to where they have come from. And because so many of the database homes are priced with (perceived) blue sky added in to the list price, it doesn't seem unreasonable to someone who is not familiar with our values to make what to them is a "reasonable" offer. Offers and closings continue to take place with some regularity. And offers and closings in a range of value will beget offers and closings of a similar nature.
(My concern and the rub) There's a theory that says real estate markets can't be considered truly stable until historical average rents and average selling price ratios are in balance. If mortgage payments average $1200 a month but I can rent similar houses for $700-850, there is a market imbalance. When the spread gets really wide, it hints at extreme imbalance and awaiting correction. Parts of So Calif. have ratios mortgage payments in the range of 2500-3000 a month and yet rents are in the $1200 range. That ratio has proven/ is proving to be a disaster. Even in our little town, rents need to be raised or property values need to come down for proper market balance.
Realtors must do what is in the best interest of their selling clients and in most cases what is best for their customers. Some Realtors help artificially inflate values in the market by allowing listing prices to be at the high range of fair up to unreasonable - but if there is some chance that someone will pay a higher price, it has to be considered in the strategy... Price it right the first time and you will be much more happy with the results that you get.
Merry Christmas and a Happy New Year to everyone. May you and your family have a Happy Holiday Season. ---aarcher---->
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