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The existing home sales numbers for December were released this past week and we now have a complete picture of the 2006 year. If you're a seller, it wasn't pretty. But then I'm probably not telling you anything you don't already know!
2006 saw the steepest drop in the number of homes sold in 17 years! That's a pretty tough market. If you sold your home in 2006, congratulations! If you bought a home in 2006, congratulations! If you tried and failed to sell a home in 2006, if it's any comfort, you're not alone!
In spite of those abysmal sales numbers, the price of homes, nationally actually rose by about 1.1 percent. I'm sure you're wondering about those numbers and I'll admit there seems to be a mismatch! Here's some of what I think is going on.
First of all, the calculate what's happened in pricing using the prices on homes that actually sold. In a down market what sells is typically the homes in pristine condition. And, they typically hold their prices better than the rest of the homes on the market. In addition, remember that all those people whose homes are on the market and who've lowered the price $50K and still haven't seen a buyer, are not even showing up here. I believe the 2007 numbers will actually show a further price decline, but that most people in our market won't feel it as much because it will just be a documentation of what's already happened. If you're a seller and you lowered the price of your home substantially, you've already mentally and emotionally taken that hit, even if it doesn't show up in the statistics yet.
As always, all real estate is local. That 1.1 percent is a national average. If you look at the numbers here locally they definitely tell a more dramatic story. We flew higher than most at the peak of the market and we're suffering more than some now. The greater northern VA area shows sales prices for 2006 down a little over 4%. As you get further away from the beltway that decline is steeper.
The National Association of REALTORS, along with several large builders says they've seen the bottom of this market. That may be true, but I don't think we'll know for certain until about May. I'll be watching to see how many homes come on the market and how many buyers show up to buy them.
Whatever 2007 brings it will still likely be a somewhat challenging one for sellers. And we may be nearing the end of the best negotiating opportunity buyers in our area have seen in many years!
As the data begins to appear, you'll see it here! So stay tuned. RSS feeds are now enabled so you can make sure you don't miss anything!
If you'd like to read the MSNBC story on the December numbers, here's the link:
http://www.msnbc.msn.com/id/16806979/from/ET/
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