The Current Market

It's better than you might think ...

According to the Federal Reserve's "National Economic Trends" report for August 2008, house prices were 14.1% lower in the first quarter off 2008 than they were in 2007. I have conducted my own research on the subject of housing prices as they pertain to North Central Texas and have determined that the average sold price for a home in the first quarter of 2007 was $192K and the average sold price for a home in the first quarter of 2008 was $189K. This represents a 1.6% decline in the average sale price for a home from the first quarter of 2007 until the first quarter of 2008, and a rate of decline 12.5% better than the average for the rest of the country. I don't know what the national average is for the second quarter, but in North Central Texas the average sold price for a home in the second quarter off 2007 was $210K, and the average sold price for a home in the second quarter of 2008 was $204K which represents a decrease of 2.9%.

Looking at the figures above and to the right for August 2008, I am concerned about several indicators which might not bode well for housing prices in the months ahead. First are the Average Number of Days on Market or DOM. These figures are all up significantly which means that it is taking longer for homes to sell. Second are the number of new listings which are all down significantly which means sellers are not listing their homes in the numbers they were previously. All of this is due to the tightness in the credit market. If people with marginal credit can't get loans, if there are fewer prospective buyers, why put the house on the market in the first place? All this means a slowing of the market which won't help pricing.

From the best I can tell, don't expect the market to imporve much until the 3rd quarter of 2009 baring any more economic surprises.