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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, June 01, 2009

Real Estate Statistics: April, 2009

As we do every month, all the major numbers, rounded up in a single place.

The Quick Summary
We hear rumblings of a real estate bottom here and there in the media. We do not see support for this notion anytime soon.

Supply Indexes
New Homes Permits, Starts, and Completions, (PDF): Declined from one year ago by 50.2%, 54.2%, and 15.0% respectively. April, 2008 permits, starts and completions had already declined from 2007 by 34.3%, 30.6%, and 30.9% respectively.

Inventory remains high at 10.7 months, despite many months of production cutbacks like this, 77.5% from the peak. Permits and starts continue to hover at their lowest levels in 50 years.

Existing Homes: Inventories rose almost 9% from a month earlier to sit at 10.2 months of supply. A market in equilibrium is often said to be around 6 months of total housing supply. The problem of excess inventory is now in its third year.

Demand Indexes
New Home Sales, (PDF): The current rate declined by 34% from one year ago. The average sale price was $254K, vs. $314.3 from one year ago, a decrease of 19.2%.

We have noted time and again the need to look beyond the headlines, which largely and erroneously reported an increase in new home sales. In fact, the current rate of new home sales, and months of supply are worse than any time since 1963.

Existing Home Sales: Declined 3.5% from one year ago, with prices down 14.9% . In the South, existing sales were down 10.9%, with price down 12.2%. Existing homes represent 85% - 90% of the market.

45% of existing home sales are distressed properties. As we have noted many times, this is an unhealthy trait that artificially skews the market fundamentals in the following ways:
1) Inflates existing home sales volume, 2) Lowers existing home prices, 3) Decreases new home sales volume, 4) Lowers new home prices, 4) Impairs the ability of individual sellers to compete at all, 5) Thus creating pent up supply for the future.
Foreclosures and delinquencies continue to set records and signal even more inventory in the pipe. On this factor alone, one cannot call a bottom is our position.

And in Greater Asheville?
From The Citizen Times: (ED Note: Citizen Times articles eventually disappear from original locations).
The number of existing homes sold in Buncombe County fell 41.1 percent in April compared with April 2008 and even dropped 21.9 percent from March 2009, contrary to the usual trend of rising sales in the spring.
This is on the order of 11 times more severe than national numbers. To be fair, the more normal reading we have seen lately is for greater Asheville to be around 5 times worse than national numbers.

In Madison and Yancey Counties, two that we monitor closely:
Home Sales: Down 30.5% from 2008, down 52.6% from 2007, and 60.4% from 2006.
Land Sales: Down 62% from 2008, 83.9% from 2007, and 91.6% from 2006.
Home Inventory: 46.4 months of supply, around 8 times the norm.
Land Inventory: 213 months of supply, around 10 times the norm.

Forecasts?
If every economic index turned around today, whether it be truck tonnage or the Restaurant Performance Index, large real estate inventories would still remain. Months would be required to work those off.

Any increase in buying would then bring in previously unlisted inventories in homes and land from a number of sources:
1)Banks currently holding off for better prices on foreclosed properties, (Business Week), 2) Individual sellers holding off, what we have called "sellers in waiting", (Wall Street Journal), 3) Builders holding off, would restart mothballed subdivisions, 4) Not to mention that foreclosures and delinquencies continue to set records, meaning more new inventory.
These sources possibly represent double digit percentage increases in inventory, which will mean pressure on prices, and likely, buyers on the sidelines. It's difficult to see a bottom anytime soon.

Thanks for stopping by,
Black Bear Realty Website
828 689 2055
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Filed Under: Real Estate Statistics and Data, Asheville Real Estate Data

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