Looking forward into 2008

I am not alone, I’m sure, among real estate agencies, brokers and developers, in sharing concern as to what 2008 may offer us with regards to real estate sales. The signs so far point to a softening market, and a transition from a seller’s to a buyer’s market. The inventory for the MLS service continues to grow, up to 820 listings now in the database, and that’s double what we had this time last year. Talk on the street is that sales are somewhat down or keeping stable with last year. The problem with that is, is that there is more product on the market compared to this time last year. So if sales at real estate offices managed to at least equal last year, that would not be sufficient to satisfy sellers and developers, because of our increased inventory.Although the real estate market in the USA still continues to drag, for some strong second-home markets, that certainly isn’t the case, such as in Aspen and Vail:

Five Colorado mountain resort counties will set a combined record of $8.56 billion in real estate sales this year even with a recent cool-down in the market. The total was reached by the end of October in Garfield County and the counties that are home to the Aspen, Vail, Breckenridge and Steamboat ski resorts, according to a report compiled by Land Title Guarantee Co. Last year, the combined sales in the same area totaled $7.41 billion through October 2006. The highest average price was in Pitkin County at $4.52 million.      

Notice that $4.52 million average price for Pitkin County (Aspen)? And the same for Palm Springs:

“DataQuick Information Systems The median price declined 7.9% in October to $350,000. DataQuick’s analysis [of] county records data showed 564 desert properties being sold in October, or a 43% drop from last year. All valley areas saw fewer homes sold with the exception of the 92264 ZIP code area of Palm Springs…  

Hopefully the fact that we also are a strong second-home market, with the ready availability of financing now available and that our market has not been hurt by defaulting sub-prime or ALT mortgages, that we can maintain the sales of last year, or perhaps even improve it. Much of that will have to do with how real estate is priced, as pricing is very important in a buyer’s market.

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