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Location: Mars Hill, NC, United States

A small, highly personalized real estate firm specializing in mountain homes and land in greater Asheville.

Tuesday, September 30, 2008

Real Estate Statistics: August, 2008

Every month we gather the major numbers here.

The Quick Summary
At the risk of engaging in understatement, the large overhang for inventories remains. When this is coupled with turmoil in financial markets, there is no reason to think this will change anytime soon.

Supply: The Monotony of High Inventories
Permits, Starts, and Completions, (PDF): In a trend that is approaching 36 months, these indexes were down 36.4%, 33.1%, and 35.8% respectively.

Single family permits, the indicator of primary concern, were down 40.3% from a year ago, and 65.57% from the peak in January, 2005. The South fared worse than the rest of the nation in all three categories. (Source). Seeking Alpha has more.

New Home Inventories, (PDF): With such drastic cutbacks in production, it is no surprise that the raw number of new homes for sale keeps dropping. There are 23% less new homes for sale now than one year ago.

However, demand persistently drops by even larger amounts, so that the "months' supply" of new homes, a more meaningful measure, stubbornly remains at 10.9.

Existing Home Inventories, (PDF): Representing more than 85% of the national market. existing home inventories stand at a 10.4 months' supply. For equilibrium, it is often suggested that new and existing inventories need to be at a 6 months' level. Long ways to go yet.

Demand Indexes
New Home Sales, (PDF): 35% less than one year ago, and 65 % less than the peak. (Source). The lowest August since 1982.

Existing Home Sales, (PDF): This segment represents 85% of the market and checked in at 10.7% less than one year ago, 24% less than 2006, and 31% less than 2005. In greater Asheville, existing home sales fell by 35% from August of 2007.

Looking Ahead
Bailouts and stock market crashes aside, inventories will have to approach a six months' supply before we can call this remotely normal. The path to that has yet to reveal itself, suggesting that buyers and sellers who have latitude in their positions can continue to sit on the sidelines.

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Black Bear Realty Website
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