February 17 - Sales of existing homes in the 4th quarter of 2007 continued the slide seen earlier in the year. According to the National Association of Realtors sales fell in 45 states; down 21% on a national basis vs. the year ago quarter. The median price declined a record 5.8% in the quarter. Prices increased in about half of the markets surveyed.
Hardest hit were Las Vegas, Jackson (MS), Sacramento, and the Riverside and Orange County areas of southern California. Foreclosures are often cited as the major cause of the declines. But all the news wasn’t bad, showing that real estate is nothing if not local. Bucking the trend with double digit price increases was the Cumberland region in Maryland and nearby West Virginia; Yakima, Washington; and Binghampton, New York. Commentators from these regions cited strong local economies, moderate prices, and a desirable lifestyle as reasons for their relative strength.
Industry experts seem to think that the turnaround will take place in the second half of 2008. All are concerned about the large number of foreclosures, which continues to add inventory to an already over-supplied market. Another problem for people looking for a retirement community is that although they might have the money and the interest in buying into an active adult community, they are having a difficult time selling their existing home in this environment. Several experts were emphatic that “when” (not “if”) the current over-supply gets back to normal, the market will resume its upward march. Late 2008 is seen by many as the beginning of the trend.
Your Topretirements editor just returned from a trip through the south where he observed big differences within local markets. Whereas southern Florida seems to be the home of bad real estate news these days, other parts of Florida are flourishing. Gainesville, for example, seems very strong. On the streets of Tallahassee “For Sale” signs are a distinct rarity, “For Rent” signs are more likely to be seen. Orlando real estate is reportedly strong as well.
Time to Buy Yet?
Ads were seen last week on USA Today from REBAC (The Real Estate BUYER’S AGENT Council of the National Association of REALTORS®), which urged buyers that this is now a great time to buy real estate. They cite lower prices, low interest rates, and plentiful supply as good reasons. And as the NAR numbers reveal, buying in the right market makes all the difference.