A Mixed Message

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Is this broken English or could it be a listing agent’s cry for help?

Reduce! Please!

DataQuick’s numbers are out for January and show a year-over-year median price decline of 5.6% combined for homes in San Diego County. But this may be yesterday’s newspaper. On the same day their January statistics were published, Federal Reserve Chairman Ben Bernanke issued the message that interest rates would likely not be raised this year or even next, and that the worst of the housing market woes may just be behind us.

There will be the naysayers, of course, who believe that we have many dark days ahead yet. My outlook falls somewhere in the middle; I believe another 6 to 12 months of moderate price retrenching may be in the cards before we turn the corner, and all indications are that the turning maneuver is going to be an ever so slow one.

Speaking as one in the trenches, buyers remain cautious but are beginning to buy. Sellers are beginning to “get it” and price their homes more realistically given our current market conditions. But, where have all of the listings gone?

Bucking the Seasonal Trends

We have come to expect January to bring a flurry of new listing activity. Whether sellers pulled their homes from the market over the December holidays or simple chose to wait until the new year to take the plunge, January typically brings a steady stream of new inventory. This year has been different. On the heels of our positive Fed news yesterday, our current supply picture may hasten a return to “normalcy”. According to the Sandicor MLS this morning for detached homes, this is the inventory picture:

 

New Listings

 

January, 2007

January, 2006

Scripps Ranch (92131)

36

61

San Diego County

4424

4571

Taking just our micro-market of Scripps Ranch, we are sitting on a mere 77 active detached homes for sale. For those not familiar with Scripps Ranch, consider the numbers in the context of a community of approximately 8,000 detached homes. There is certainly not a lot for a buyer to choose from. In January, there were 18 detached sales (compared to 21 last January), which gives us an absorption of approximately 4.3 months. With six-month’s worth of inventory representing a “normal” market, this actually puts us in a “Seller’s Market” category.

Of course, sellers shouldn’t see our current situation as giving carte blanche to price their homes at 2006 or even 2005 levels, but it does suggest that things are not as gloomy as might be inferred by much of the media. In the case of our agent crying for help, this home is in fact (in my opinion) slightly over-priced. For those that are willing to price their home correctly for today’s environment, however, I see no need to panic.

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