There’s no glossing over the fact that 2008 was a difficult year to get a home sold. The demand for homes decreased due to tightening loan requirements (which is largely a good thing) and a rather poignant feeling of caution among buyers. The sharply receding economy has produced those fears, along with bad news reports about the real estate market in particular.
Supply levels have been boosted — at least nationally — by job losses and foreclosures. (But click here to see a previous post about low unemployment and foreclosure rates in the Harrisonburg area.)
As a result, home sales in the area decreased significantly…
Homes sold in 2007: 1,248
Homes sold in 2008: 932
That’s a drop of 25% from one year to the next. There was a similar drop in the total dollar amount of sales — the sum total of all the home sale prices from each year.
With this decline in sales, you would expect a corresponding decline in prices. But it just ain’t so. Remarkably, the average price has held fairly steady…
Average Sold Price 2007: $224,394
Average Sold Price 2008: $223,747
That’s a drop of less than one-half of one percent! The median price from one year to the next is even closer…
Median Sold Price 2007: $195,100
Median Sold Price 2008: $195,000
(For those of you who are not mathematically inclined: If you line all the numbers in a list in order from smallest to largest, the median is the number in the middle.)
This is great news! — but you’ll have a hard time finding it in the local media, which seems to spend all of its column inches focusing on the drop in sales volume.
Let me ask a question. Which is more newsworthy: sales volume or sales prices? There are roughly 50,000 homes in the city and county. As of this writing, there are 769 homes for sale in the local Multiple Listing Service (MLS). Even if we rounded that number up to a generous 1,000 to account for homes for sale that are not in the MLS, that’s still only 2% of all the homes in the area. A drop in sales volume is very, very relevant to that 2%. (It’s also highly relevant to those who have a business that depends on home sales, but I’m not asking for any sympathy here.) However, it is not particularly relevant to the other 98%.
The stability of home prices in the Harrisonburg area despite the decline in sales volume, despite the flagging national economy, and despite the falling sales prices in most other areas of the country IS NEWS FOR 100% OF HOME OWNERS.
So I say, shout it from the rooftops. We could all use some good news!
1. These figures, like all the market data in this blog (unless otherwise noted), are derived from the Harrisonburg-Rockingham Association of Realtors MLS. Even though this does not include, for example, foreclosure sales, auctions, or homes “for sale by owner,” the trends in this data is a helpful barometer of the health of the local real estate market.
2. When we say “homes in the area,” we mean townhomes, condominiums, duplexes (with each side counting as one unit), and detached houses used for residential purposes and located within the City of Harrisonburg or the County of Rockingham.
3. Finally, if you received our annual mailing, the numbers in this post vary a bit from the numbers in our letter because a few additional 2008 sales were entered in the MLS after we ran the numbers for the letter.