Wednesday, April 2, 2008

Are we there yet? Are we there yet?

Talking about the bottom of the real estate market is like listening to kids in the back seat of the car on a long family roadtrip. "Are we there yet?" "How much longer?" "I just want to get there!" and of course "He's hitting me." (alright, maybe that last one doesn't pertain to this discussion..)

I've spoken with a couple of bullish realtors this week who believe we're at the market's bottom; they're seeing a dramatic increase in activity from buyers. I've also spoken to a couple of bearish realtors who believe we're at least a couple of years away from a recovery, and maybe more; they don't think the fundamentals are in place to support today's prices, and they believe that markets in general over-correct.

Who's right? I'm not sure. I'm more bullish than bearish, but I can't say we're out of the woods yet.

I pulled data from the MLS this morning, comparing 1st Quarter 2002 numbers with 1st Quarter 2008. I pulled data for Sold Houses, Single Family Residences, between 1,900 and 2,100 sqft, and in Zip Code 85382 (Fletcher Heights area in Peoria).

 1st Qtr 20021st Qtr 2008
# Sold3214
Avg Sqft1,9981,998
Avg List Price$180,800$257,050
Avg Sold Price$176,183$245,621
Sold Price/Sqft$88.18$122.93
Sold as % of List97.45%95.55%
Avg Days on Market60155

Obviously the market is worse this year. Even though there are more homes in zip code 85382, there were less than half the number of sales. In addition, the Sold Price as a percentage of the List Price is lower, and the homes were on the market longer.

However, if the market had appreciated 5% per year since 2002 (the long-term Phoenix average), the Average Sold Price would have been $236,103.

Does that tell us things aren't as bad as we think? Or does that tell us there is more room for prices to fall? I guess that depends on whether you're a bull or a bear...

Your small bull (more of a calf, really) Realtor,

Chris Butterworth

[tags] market forecast [/tags]