Gwinnett County sales comparison for residential real estate. 7/07
It time for me to make my prognostications for the coming market, while recapping that which has happened. Please keep in mind that even on the 14th of August, the numbers for July WILL probably change. I will come back and correct them before posting the September results. I originally posted the June number on July 10th, and they had changed pretty significantly by August 6th when I reviewed and corrected them.
I see a solidification of some of the trends that I pointed out last month. Listings are up vs. last year by 13%, same as last month. This is actually trending down slightly when trended over a three month average. However, I still think we are going to see an increase in troubled properties in the next few months, and continuing for the next 9-12 months. Sold listings and pending listings are still dropping as a percentage of new listings and vs. last year. The trendlines are also pointing solidly down. Not good news…
Prices are pointing up, but I don’t think that will continue. I think we need to see a drop in prices to spur buyers into action. I don’t expect that to be much, but a modest decrease of maybe 2%. Currently we are up 5% vs. last year. June was up 4%. This might also be partly a function of some of the new home sales on the higher end of the market.
Time on the market is also trending up vs. last year. We are up to 82 days. That is almost 2 weeks more than this time last year. Last month was 79 days on market, but that was also 15 days more than June 2006. May sales were the lowest this year at 76 days on the market.
Those outside influences are still at work, and there aren’t a lot of changes from last month… but there is one that is huge. Last month I mentioned an increase in foreclosures as a result of poor financing decisions by buyers over the last couple of years. But, that has almost become a side story. It is still quite true that there is a veritable flood of foreclosures that could be looming on the horizon. However, I think the biggest influence on the market is the current mortgage climate. Feel free to look at last month’s report to see everything I said about foreclosures.
The current mortgage climate is tough. For buyers with weak credit history, the market is almost closed. Alt A loans (stated income, no documentation) will be away from the market for the foreseeable future, except for the rarest of good credit buyers. And expect that 0% down and even 3% down loans will be reserved for those with better credit.
Overall, this is decreasing the pool of buyers in the market. But, the quality of serious buyers will be improved. This is going to tighten the buyer’s market even more for at least the next few months. As we move toward fall and winter, when fewer homes are traditionally on the market, there might be some easing for sellers, but not much. We’ll have to wait to see how this credit crunch shapes up over the next few months to see how it will affect sales next spring. For more on this, take a look at my posts on the housing bubble, and interest rate predictions. I stand by my opinions regarding flip opportunities from last month. I have also gone a little deeper into flipping here and a bit of an investing primer here.
Finally, remember that we can only get an accurate look in the rear-view mirror. We will only KNOW there has been a change in the market when we see it has already changed. We’ll know that change has taken place when we see all of the best deals are already gone.
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