There's an article in today's New York Times about a zip code just south of Los Angeles that has had the biggest decline in home sales of any place in the country. Sales have declined by 78% between third quarter 2006 and third quarter 2007. That's certainly a much larger decline than anything we've seen here locally.

If we look at Culpeper County, the hardest hit county, locally, and look at the last three months of data, there's a 27% decline in total sales year over year. Now bear in mind that 2006 was also anemic compared to 2005. For the total two year period, the drop between 2005 and the last three months of 2007 shows a total drop of 58% in home sales in Culpeper County.

The conclusion the author of the piece in the Times reaches is that it's come to this because of an impasse between buyers and sellers. Buyers are unable to afford to buy at current prices. Sellers are unwilling, or often unable, to bring down the price of their home in order to sell it. The author mentions one family whose home has been for sale since August. In that time they've dropped the asking price by 5%.

Strangely enough, that's the only statistic the author provides about price drops in that neighborhood. If it's anything like the local area other homes in that area may tell a different story.

Home prices here are clearly dropping. While the percentage can vary widely, neighborhood to neighborhood, 20% to 30% drops in average sold prices are not uncommon right now. And, that's a good thing!

While I'd question some of the author's conclusions in the NY Times article, he's got one thing right. When prices get to the right place, buyers will come back out. We're seeing some of that, it appears in the last couple of months. I can't tell you if we're at the bottom yet, but I think there's a decent chance you can see it from here.

Of course, climbing out of the bottom is going to take time. But I believe sellers in our area are starting to do their part. That's good for all of us!