2009 Year End Market Perspectivee
The last quarter of 2009 gives hope to the up coming market in 2010. Having spoken with a number of different agents, owners and brokers around the region I am satisfied that the market is in the early stages of rebounding. Let me define what I mean by rebounding. Rebounding means that more buyers will purchase this upcoming year than did last year. It means that we should begin to see more properties sell than get listed. It means that prices are bottoming out. How rapidly inventories decrease is anyone’s guess. An educated guess is between 2 and 3 years before inventories reach a level where prices might rise. There is definite pent up demand. This can be measured somewhat by looking back over the past five years and seeing how the number of sales has dropped in this last year to something less than 50 % of what was sold at the peak of the market five years earlier. The population is increasing due to births and immigration. People are migrating to places like
Based on a five year look at the market in all sectors we currently have between one and five years worth of inventory. This is gauged by looking at the number of properties sold versus the number of properties for sale. For example in the towns of Wolfeboro, Tuftonboro and Alton in the $400,000 to million dollar range there are currently 121 properties for sale with a total of 28 having been sold in ‘09 It would take almost five years at this years sales rate to sell all 128 homes.
The higher the price range the larger the inventory relative to sales and the longer it takes to get sold. This is a curious circumstance which comes about due to lack of motivation to get sold and the Sellers ability to “hang onto” their home. It is the “I do not need to sell” syndrome. About 25% of our higher end inventory has been sitting unsold between one to three years. There have been very few foreclosures in this bracket so there has not been much market pressure to lower prices. What has sold in the upper reaches in the last two years has been from %5 to 15% off of peak prices. Out of 142 active listings around the
Generally speaking in order for prices to rise the stock of homes for sale would be at 50 % of what has been sold in order to create the demand for prices to go up. In 2009 in the $80,000 to $160,000 bracket of homes there were 100 sales in 2009 and there are currently 100 homes for sale. Prices in this range are not rising but remain relatively level. Low interest rates, and five years of a declining real estate market are bringing the buyers back into the market. Despite the number of sales being level with the number of homes sold prices still aren’t on the rise. Continued foreclosures and ample inventory are the basic reasons behind this situation.
Pricing your home right and confidence in your real estate agent go hand in hand. One cannot be accomplished with out the other. Be very wary of agents that price high. In today’s market overpricing can be very costly down the line. Price right today and save thousands.
Posted at 03:47PM Dec 29, 2009 by Maxfield Real Estate in Real Estate | Comments[0]
Welcome to our new website and blogging area
Hello and thanks for visiting.
I hope you enjoy our new website. I would invite you to explore. For those who just want listing info the quick search and pre searches will get you there fast. Once you get there we have school information and morgage calculators. These calculators can give you an idea of monthly payments and what you might be able to afford.
We have a new section for subdividions and projects. As we have just gone live we have only one of our projects posted. It is a honey though. We are offering covered boat slips at Channel Marine starting at $69,000 for a 30 foot slip.
From time to time I will be posting news about the vitality of the regional market. As you will see I have a few postings already from a month or so ago. I hope you enjoy the site and if you want regular listings in a specific catagory just sign on to our automatic e-mail lisings results. Get the new listings hot off the press.
Thank you for visiting,
Chip
Posted at 02:55PM Aug 20, 2009 by Maxfield Real Estate in General | Comments[0]
Current market Historical Perspective
Food for Thought - A Historical Perspective
BY
Chip
Maxfield Real Estate, Inc.
Just over two decades ago in the mid 1980's real estate began a meteoric climb.
1985 through 1989 real estate values increased by 150%. Took 5 short years.
1990 through 1996 real estate values dropped from 20% to 50%. That's four years of decline and two years at the bottom or flat.
1996 to 1998 saw prices rise to previous peak levels. Took two years
1999 to 2005 saw values more than double. Time; Six years
2006 to present values have declined. 3 and 1/2 year time frame waterfront 15%, residential 25%.
2009 to 2011 prices will bottom and remain flat for two years.
2011-12 we anticipate prices will rise.
The time period going forward from today's date is modeled after the 1990's real estate market and as you can see the pattern between the two periods is remarkably similar. I can still remember how in the 90's we all expected things to turn around about 3 years before they actually did. This caused a lot of sellers to lose more value and more equity on their real estate as they failed to respond to the market as it was.
In the mid 1980's to mid 1990's period a huge number of Savings and Loans failed and many military bases were closed affecting the economy in many states. The economic news was bleak The stock market saw large movements both up and down. In October of 1987 Black Monday happened. "The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1738.74 (22.61%). The DJIA did not regain its August 25, 1987 closing high of 2,722 points until almost two years later."(Wikipedia). There were dire predictions about the health of the economy and some real doom sayers.
I think that today's economy woes are more wide spread. We are in worse shape than the 1990's economy but I am still optimistic that things will eventually turn around and that the time tables between the two periods will continue to mirror each other.
Chip
May 5th 2009
Update July 22, 2009
The lower end of the market continues to sell at a reasonable pace while the upper end remains sluggish due to seller's unwillingness to recognize the economy for what it is relative to the value of their waterfront holdings. A few who have responded and lowered their price accordingly and have met with success selling anywhere from 5% to 15% off peak sales prices.
The preceding 12 months (July 08 to July 09) the number of properties selling at 1 million and above was 33 homes. In the 12 months prior (July 07 to July 08) the sales volume was 65. This is a reduction in homes sold of 50%. The total number of properties for sale in this million and up category is 184. If no new listings came on the market and sales remained level it would take 5.5 years to sell these homes. Waterfront sellers need to pay attention and get the full story from their agent. It could mean a great deal economically.
The Good News: Buyers pay attention
1996 to 1998 saw the vast majority of the real estate market regain all of its losses with a return to the peak values of 1989. Commercial and condos lagged by a year or so as their losses were so deep. (As a foot note at the 1989 peak market, real estate values had climbed by as much as 150% over a five year period.)
1999 to 2005 saw a very strong market with annual increases in value in the 20% range.
All of this activity came on the back of one of our worst real estate markets ever. During the down period 1990 though to 1996 people were afraid their value would never go up. Well it did and it did it with a vengeance.
I personally purchased three properties in the 2003 to 2004 time frame. This was two to three years before the market began to rise again. We are currently in that same place as I was in when I made my move in the market. To this day those properties are all valued about 150% higher than what I paid for them even taking into account the downturn of the market.
Knowing the past is a good indicator of the future. As long as the number of people born exceeds the number of people who are dying and as long as conservation measures are being taken to preserve open lands, and as long as planning boards make it more difficult to create new housing there will always be a strong demand for housing. The rise in property values over time will always beat inflation.
Interest rates in the 90's were in the 6 to 5 % range much as they are today. Huge inventories allowed for favorable terms and negotiations. Large inventories also allowed for more choice. You cannot beat the current market for opportunity and choice.
Posted at 03:27PM Jul 22, 2009 by Maxfield Real Estate in Real Estate | Comments[0]
