Analysis of 2008 Market Statistics

After several years of bucking national trends, the slow down in real estate activity hit home in 2008 with unit sales off by 26.6%. Our market began contracting in the late 3rd quarter of 2007 when the effects of increased property taxes were felt. There was a temporary return to normal activity in the 2nd quarter of 2008, but it was short lived and by year end, the general state of the economy, the lack of consumer confidence and the arrival of long-delayed property tax bills severely depressed sales.

The largest reductions were felt in the heart of our market, especially below $75,000, as a result of curtailed or eliminated programs for low down payments and down payment assistance. Lack of activity at this end, served as a bottleneck to restrict new buyers and move-up families. Since we don't have an influx of newcomers, many of the folks who would like to sell and move up futher are unable to do so.

In the midst of all this gloom, there are some bright spots. For buyers, interest rates have fallen to near historic lows and it appears they will remain below 6% for the forseeable future. For sellers, the inventory of homes for sale has dropped below 700 for the first time in many years, meaning less competition and less downward pressure on pricing. Average sale prices actually increased by 2.8% in 2008 as compared to an 18% decrease nationally.

What's in store for 2009? The 4 legs of the residential real estate table are sales price, interest rate, property tax and consumer confidence. Sales prices have remained stable, interest rates are very attractive, the State's property tax reduction measures began to be felt in the 4th quarter of 2008 and will have an even more positive effect in 2009. All that remains is consumer confidence. The various stimulus packages are currently at work and Pres.-Elect Obama will have his own programs for economic recovery. Hopefully the combination of these factors will result in a restoration of confidence and a return to an active real estate market.