Steady sales, longer days on the market and more inventory were the flavors du jour in January. The median price, after holding firm the last couple of months, slipped to a new low of $281K. Meanwhile, pendings increased. Though it’s still a buyer’s market, buyer activity is picking up. read
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Reno Ignoramus
So pending sales are up. But so also is inventory.
The most accurate leading indicator of a real estate market’s health is the pendings:listings ratio. All other info, like actual sales prices, are lagging indicators.
The pendings:listings ratio remains dismal in the Reno-Sparks market. For the entire market, the ratio is below 10%. In the higher priced segments, it is below 5%. There are YEARS of inventory in most market segments. What we have here is a glutted market with less than 10% of the houses with an offer.
Either sellers will continue to hold on to their unrealistic expectations and 2007 will look just like 2006, or sellers will get real and lower their prices.
There is some evidence prices are falling. From your own numbers:
November median price………$295,000
December median price ……..$294,000
January median price ………$281,000
Surely not too much should be made of a single month’s change. But I believe that you have shown a declining median consistently over the past many months.
Grand Wazoo
Be sure and read today’s (2/5) front page story in the Wall Street Journal on the surge of vacant homes on the market – the highest level in four decades – a seriously negative indicator of the current and future housing markets. Serious enough to make the front page of the WSJ!
“Vacant Homes
For Sale Cloud
Economic Hopes
Data Pointing to Glut
Are Worst in Decades;
Impact of Speculators
By MICHAEL CORKERY
February 5, 2007; Page A1
Amid brightening hopes that the U.S. housing market is stabilizing, some economists are zeroing in on a piece of data that could augur badly for the consensus view: the homeowner vacancy rate.
That figure, an often-overlooked measure of how many homes for sale in the country are empty, has climbed to its highest level since the Census Bureau began tracking it four decades ago. Last week, the bureau said that in the final three months of 2006 there were about 2.1 million vacant homes for sale.
That brought the national homeowner vacancy rate to 2.7%, up from 2.0% a year earlier. Before 2006, the number had never risen above 2.0%. Like the housing economy more broadly, the measure varies by region: The South had a homeowner vacancy rate of 3.0%, the Midwest had a rate of 2.9%, the West had a 2.4% rate and the Northeast had a rate of 2.0%.
The report, which usually gets little attention, sparked fresh concerns about the housing market. Goldman Sachs economist Jan Hatzius concluded in a report last Monday that rising vacancies signal that excess housing supply continues to grow — and that new construction has to decline further this year, even after a 13% decline in new home starts in 2006.”