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by Jace Stolfo
on Monday, April 21st, 2008 at 8:31pm.
As a service to my valued clients, I would like provide you with quarterly market snapshots of the Ada County real estate market. There's a lot of information floating around out there relating to the current market conditions, some of which is true and some is not. In this blog I want to provide you accurate information so you know the facts. If at any time you would like to receive more detailed and regular statistics just let me know, I would be glad to provide them.
Market Summary For many sellers, it's a very tough real estate market: a lot of competition, low offers, and longer day's on market. Generally, the higher the price range the more difficult it is to sell. Home values have softened in some areas due to an oversupply of inventory and in some cases distressed sales (foreclosures, short-sales, and bank owned property) but the sky is not falling. The largest percentage decrease in value is in the high end homes.
Quarter 1 ‘08 Compared to Previous Quarters Historically, sales fluctuate depending on the time of the year so it's important to compare apples to apples when looking at home sales. Comparing the first quarter of 2008 with the first quarter of 2007 sales was down about 37 percent (Fig 1). (Fig 1).
For a broader view of first quarter home sales see Fig 2 where sales are tracked back to 2002. It is important to remember that home sales in 2005 and 2006 were record setting.
Quarter 1 '08 New Construction vs. Existing
A more detailed look at the first quarter of 2008 shows both existing and new construction home sales were improving but existing homes saw a greater increase (Fig 3).
Quarter 1 '08 Sales by Price Range
When analyzing home sales it is helpful to look at what price ranges the sales are occurring. Fig 4 shows that new homes between $200,000 and about $250,000 accounted for the largest market percentage at about 7 percent. For existing homes, most sales occurred between $160,000 and about $200,000 (24 percent).
While it is obviously a tough time to sell, it's a great opportunity to buy. For first-time homebuyers interest rates are still low and government loan programs like FHA are providing great financing options with a 30 year fixed rate around 5.75 percent. Lending standards have tightened, but banks are still eager to lend to people with good credit. For investors, depending on there goals, there are also some great opportunities. The market conditions are not right to try and flip but if you can buy below market value now it could lead to some good profit potential in the future. Call me to discuss investment options.
Data Source: Intermountain MLS. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. This information contained this letter is for general market analysis. No representations or warranties are made as to the past or future appreciation or depreciation of property values.