I think every top broker in this business will tell you that things are slower than normal right now. My biggest hurdle is that NY weekenders, our steadiest pool of $1 million+ home buyers, are too busy watching the stock market to buy houses. At last count I am working with 21 buyers. They are in various stages of buying. It ranges from one couple who has been looking for just the right thing for 4 years, to another couple who found their perfect dream house on the first and only time they looked (but they want to wait for one more bonus cycle to act). More typical are the several who have been renting and looking to buy for the last 6-12 months or so. They are committed to the area, and will step forward when the economic outlook is more stable. When the financial situation improves, these buyers will act at some point. Some will come in and get great deals while the getting is good (in the next few months) and some will prefer to wait until the all clear bell is rung somewhere. They may not get the bottom price, but they will feel safer with their decision. Im fine to help and wait as long as is necessary.
Below I am providing some hard facts for the area Real Estate market. I have to say that I am reluctant to furnish these facts. I hesitate to ever quote average market prices because this number can be very misleading. The main reason for this is because it does not take into account the improvements made to houses over time. This is, of course, an impossible number to calculate. An accurate average price number would have to take a basket of houses that sold one year, then had only basic maintenance done to them, and then have the same basket sell again in another year. That would give you the average price increase or decrease. For example a house that is bought for $1 million in 2006 and then the owner puts $500,000 into it and sells it for $1.4 million in 2007. Did the market go up or down? The average price statistic will tell you it went up, when in reality it went down. On top of that, average prices are also skewed in this area due to the very limited number of sales. Additionally, this info is only from sales that were publicly listed. Each year we have a handful of private sales in the area which are usually at the high end and would create a higher average price if they were included. This information is the average from Washington, Roxbury and Bridgewater combined.
# Houses Sold Avg. Price % Change From Prev. Yr
2002 105 $573,293
2003 113 $724,167 26.3%
2004 99 $849,251 17.2%
2005 121 $933,635 9.9%
2006 103 $963,265 3.2%
2007 106 $1,077,944 11.9%
2008 to date 70 $1,066,302 (1.1%)
So, is the market really only down 1.1% this year? For that matter, was it really up 11.9% last year? The answer is NO! If I look at what things could have sold for a couple of years ago, vs. what they would likely sell for now, I would estimate we are down at least 20% from the highs. The more interesting number here is the number of houses sold. There are currently 4 houses under agreement. If we assume that 3 of them close (I know for a fact that one will not close this year) and that a few more things sell with quick closings, we could be looking at only 75 or so sales this year. This would be down 30% from last year. Most buyers I have dealt with have put significant money into their houses. Almost every house up here needs something done. This amount of money that has gone into renovations, expansions, landscaping, pools, tennis courts, etc just cannot be factored into these numbers.
Comments and Questions?