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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.

Monday, January 05, 2009

November, 2008 Real Estate Statistics

November numbers have all been reported, so here is the roundup.

The Quick Summary
Inventories continue to climb while prices and demand fall. There are no statistical indications as yet that any kind of turnaround is nearby.

Production and Inventories
Permits, Starts and Completions, (PDF): Declined from one year ago by 48.1%, 47.0%, and 22.8% respectively.

This represents the lowest level for new starts since 1959, and with respect to single family homes:
Single family housing permits, the most leading of indicators, again suggests extensive weakness in future construction activity dropping 46.28% nationally as compared to November 2007 and an astonishing 73.79% since the peak in January 2005.
New Home Inventories, (PDF): Are down more than 30% from a year ago in terms of raw numbers. However, when expressed as "months of supply", a more meaningful measure, they stand at 11.5 months. This has barely budged from the high of 11.8 months of supply earlier this year. Normal markets would like to see around 6 months of supply.

Existing Home Inventories, (PDF): Unlike new homes, the raw number of existing homes is essentially the same as one year ago. When expressed as months of supply, it stands at 11.2 months, a new high. This segment represents 85% to 90% of the national market.

Demand Side Data
New Home Sales, (PDF): The current pace stands at 35% less than one year ago, and more than 70 % less than the peak in 2005. 25% to 50% more new homes were sold nationally during the years 1963, 1964, 1965, or 1966 than will be sold this year.

Existing Home Sales, (PDF): Fell 10.6% from one year ago, and 31.0% from 2006. Calculated Risk gives perspective. It is important to remember that for existing homes, foreclosed properties represent 45% of total sales.

Forecasts?
Putting the larger issues of the global economy aside. Buyers or sellers with latitude in their positions would do well to wait as the market is close to 50% over supplied. For us, this would mean that prices will have to fall before inventories can be worked off.

When the months of supply numbers begin to decline for a couple of months in a row, this would seem to be a good preliminary indication that the road to equilibrium is more clear.

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Black Bear Realty Website
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Filed Under: Real Estate Data and Analysis

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