Yes, its that time of year already. Summer in the Northwest...not too many things can beat it. The weather is gorgeous, the city is hopping with events, and the real estate market is.....STABLE.
Obviously the climate in the real estate market and the wider economy is a little less sweltering than our weather has been so far this summer, but overall things could be much worse . The trick in analyzing market trends is to have data to measure against. For us, the data available to measure against just happens to be from the hottest real estate market in history. It is crucial to keep that in mind when looking at these trends. At first glance, you may feel that the charts I'm going to share paint a bleak picture. But when you consider that the data I'm using is from the past 5 years (translation: ridiculous, unsustainable growth rates and loose credit standards) then you may feel pretty good about the recent market activity.
Number of Sales
The first chart we'll look at shows the number of homes sold during the first half of each year (2005-2009). Pretty apparent that we are down in numbers from 2006, but I'm not convinced that is such a bad thing. Think about it...in 2006 we were in the midst of loose credit, risky loans, and EVERYONE was jumping in. A few years later when mortgage defaults began piling up, we realized that values had inflated due to an artificial demand. Now we are seeing demand drop back down to a realistic level, where subprime mortgages don't make up a large market segment. The downside, all that "equity" you built during the boom years may have dried up. But "equity" experienced through market value increases is not real money. Its sort of like going to a casino with $20 and sitting at a blackjack table. If you win your first couple of hands you can likely gamble for awhile with "house money", but you might want to pocket your $20...otherwise you could end up with "negative equity" when your hot streak ends.
Median Sale Prices
When you consider the drop in number of sales you would think that prices have dropped through the floor. However, you'd be wrong (at least so far). Though sales have become less frequent, the prices of those sales has remained relatively strong. This next chart shows the rise and fall of median sale prices for sales in the first half of each year (2005-2009). Interesting to compare the trends in this chart to the previous one...
Sitting on the Market
One of the main worries I hear when I'm talking with people about the prospect of selling their home is "I don't want my house to just sit on the market forever". This is a reasonable concern. I mean, who wants to keep their house spotless day in and day out just in case that perfect buyer decides to walk in the door TODAY? Well, hopefully this next chart will help you rest a little easier. If your home is near the median value for homes in our area and you are willing to be realistic with your pricing, you should experience pretty speedy results. Market time is up from a few years ago, but still relatively low. Here are the median days on the market for sales from the first half of each year (2005-2009).
If you want to get an even more detailed look at recent sales trends in our area, please see my previous post titled "Making Sense of the Olympia Real Estate Market: A 10 Year Snapshot". Now quit reading about statistics and go enjoy the sunshine!