Last week I shared with you the danger involved in basing your decisions upon the housing market reports released during the week, because it was dated information, about a month after the fact. Deciding the actions you should take if you are about to list a home based upon that report would be like trying to decide what to wear today by looking at a month old newspaper to see the weather forecast.
The Springfield housing market is slowing. March home sales fell by 104 sales or by 29.2% to 252 from last year. Home listings going under contract fell by 99 or 20.3%. Sales pending today stand at 98 fewer than last year on this date or down by 18.4%, which means April will probably be down from last year.
The first quarter of 2008 experienced closed home sales falling by 161 or 19.4% from 2007, for the fewest home sales in a first quarter since 2001. The 991 home listings going under contract were down by 209 or 17.4%. Both the March slowdown, and quarterly slowdown is unfamiliar territory for this normally stable housing market.
You will hear when the official report comes out at the end of the month that the silver lining is the median sale price and the average sale price was up. That my friends is of little consolation to those that have not sold. One hundred percent of nothing is nothing.
You will also hear that the number of new listings entering the market is also down. The 1361 home listings taken in the first quarter were down by 218 or 13.8% from 2007. This is good news, however due to the falling number of sales, the 1755 home listings available for sale today are the most ever for this date, up by 138 or 8.5% from a year ago.
Overall there is currently a 7.6 month inventory of homes listed for sale. Homes listed between $50,000 and $75,000 have the least with a 3 month inventory, while the $300,000 to $400,000 have the most with an over 16 month inventory.
It was reported this week by the SJR that building permits fell in 2007 in Springfield to their lowest level since 1984. Many of the homes in the $300,000 to $400,000 range are new construction. The Springfield Area Home Builders Association Showcase of Homes this summer will be held at Savannah Pointe with developer John Klemm reporting prices starting at $300,000, creating even more competition for builders with homes already on the market at those prices.
The one price range that really stands out to me is the $75,000 to $100,000 range, the perennial biggest sales range by far. For the first time since I began tracking sales for Let's Talk Real Estate the inventory of homes for sale between $75,000 and $100,000 exceeds six months.
Why is that important? This is the most popular price range for first time home buyers, the most important buyer in any housing market. Without first time home buyers purchasing first time home sellers listings, the first time home seller can't purchase at the next level, and so on. That's why you see the largest inventory in history. Not enough move up buyers, or job growth bringing in new buyers to the market.
There you have it, our market is officially in a slowdown. Let's count our blessings, we've had four great years where the rest of the state and nation tanked. Even with our slowing market we are not in the tank. But people that must sell their homes better be aware of the market conditions if they want to sell.
During the first quarter the CAAR member brokers added 1361 new listings to the record 1604 available to begin the year. The 690 agents in the MLS sold and closed 667 home listings. In other words one in five home listings sold.
I anticipate the low interest rates at near 30 year lows will spark demand, and activity will pick up as it does normally in the second quarter. Even at that only one in three home listings will sell in the second quarter. Regardless the 1755 homes listed for sale today exceeds the 1247 sold in the second quarter of 2007. Expect an additional 1800 to 2000 home listings to come to market between now and the end of June to compete with current sellers.
If you must sell your home, you'd better not make any mistakes in the three areas that determines whether a home sells or doesn't sell; price, condition, and agent selection.
