Just when we have started thinking that we might be building some momentum we got slammed with a lousy August having a local home sales down to 13.2 % from last year.
Even more discouraging thing is to know that there is a decline in sales from July to August which in normally conditions is in the 10 percent range. This year we have found it to be 26 %.
Above that we also had a record drop in the average selling price, which has been lowered down 10% in August as compared to last year.
Real estate sales and Prices
When in most areas across the country real estate sales and prices were going really bad, we were in pretty good shape having a drop in sales but with a very modest price decline.
Now when we have witnessed that there are signs that the national market has reached the bottom and there is a recovery going on, local sales and pricing go into the tank.
Year-to-date Home Sales
By this year-to-date sales has been left at 1,971 homes and having 75% of the annual sales completed we are on a pace that we can expect to finish with about 2,600 closed sales, which is down 16% from last year and the lowest level since 1990.
If we talk about the average selling price, last year was the first time that our records had gone back to 33 years that we had a year-over-year price decrease and it was just 1.0% that is very minimal .
Drop in Average Selling Price in 2009
Well in this year of 2009 we are on a pace for having a price drop of perhaps 5% and a $240,000 average selling price will be going to take us five years back to 2004. If we combine the projected sales and average selling price then that will equalizes a total market of about $625 million, which is a drop of 20% from last year and down 36.5% from the peak in 2005.
Mix of Homes Sold
When I tried to find a silver lining in the August numbers, we are struck by the mix of homes sold. In August 2008 we were having 18 sales over $500,000 for a total volume of $14.6 million.
This August we were having just six sales for a total volume of $3.8 million, so this shows that we had lost a big chunk of the sales in the higher end.
Big reason for the drop in average selling price
A big reason for the drop in average selling price are the newly constructed single family homes. Last year there were 23 at an average of $539,087 for a total volume of $12.4 million. This year at an average price of $324,289 for $4.2 million there were 13.
Resale Home market prices
If we look at the resale home market, the average price was exactly the same while sales were down 19.3 percent: in 2008 it was $248,979 and in 2009 it is $248,909. In August Multi-family home sales were up 23 % and the average price was down just 0.7 %.
The bottom line is that in 2005 the local residential real estate market totaled almost $1 billion and today we are on a pace for maybe $625 million.
Most concerning fact is that with sales down 70 percent from the peak years and a drop in sales value of $125 million, new home construction has almost disappeared.