Home Sale
Thud to 5-Year Low Point
NAR Report of Existing Home Sales No Surprise to
Anyone
Mortgage Rates Up For Third Straight Week
High
Appraisals Signal Change
Home
Sales in 'Free Fall'
Oh boy, I wish I had better news. The Fed and the media are having a field day with the housing market. Yesterday I heard a
report on the radio that the Fannie-Mae chief had announced that house prices would drop about 4% this year, even more next
year, and the drop would continue for years to come. If only the reporter would add, "Remember, these are national figures
and may not be accurate in your market". My fear (and it's echoed by many other people in the industry) is that the news
becomes a self-fulfilling prophecy. The more the media announces home-sales and home prices dropping, the more buyers sit on
the sidelines and wait for the prices to drop.
We had a slight surge in sales in August, but since the Labor Day weekend and back-to-school, the market has been deathly
still. Showings have dropped significantly. I'm still getting phone calls from the marketing I do, but it's mostly lenders,
calling to offer their services in case I talk to a real live buyer.
I've talked to buyers who were hot to buy a couple of months ago, who now say they think they should wait for prices to come
down some. I explain, in vain it seems, that prices are not in free-fall in our area. Foreclosures are not taking over our
market (Prince George's County seems to be weathering that storm very well, thankyou.) However, interest rates are going up
and waiting may place buyers in a position where they can't take advantage of price reductions.
The problem is that it is likely that prices will continue to drop. Partly because we're entering that time of year, and
partly because of the media. The following statistics tell the story:
In 2006, the months of June, July and August looked like this in Prince George's County:
June - 2,056 new listings; 1,219 contracts written, total dollar volume sold $427,262,179
July - 1,969 new listings; 1,184 contracts written, total dollar volume sold $363,640,435
Aug - 2,054 new listings; 1,171 contracts written, total dollar volume sold $424,592,204
In 2007, those same three months looked like this:
June - 2,014 new listings, 724 contracts written, total dollar volume sold $232,168,671
July - 1,963 new listings, 729 contracts written, total dollar volume sold $205,298,215
Aug - 1,926 new listings, 570 contracts written, total dollar volume sold $198,091,212
That's a 53.35% drop in dollar volume sold over the same month last year! It's even a pretty big drop from just
last month. As you can see, around the same number of homes are coming on the market each month as last year, but the number
of homes that are actually selling has dropped by a huge amount. This is because the buyers are staying away in droves.
And when I hear the news each day -- much as I don't like it -- it's hard to blame them.
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