Yes, we continue to be the anomaly in the world of real estate. At the National Association of Realtors meetings in Washington, DC last week we heard the wows of the rest of the country and how houses aren’t selling – prices are reducing daily – foreclosures paint their real estate landscape and they don’t see any end in sight. Nationally, there is a 9 month supply of houses for sale – as you see below, we have a 1.6 month supply of houses. Foreclosures are a part of our business but vacancies rates only represent 25% of our market, down from 33% last year showing we are selling our foreclosures. Our area does have a huge supply of short sale properties on the market which may turn into foreclosures, but as the government and banks work together to systematize and shorten the process to approve short sales – this may not occur. In many areas, our prices are stabilizing as a result of high demand and low supply, but we are encountering a significant issue with appraisals. There are new rules and regulations that are changing our appraisal landscape that places appraisers on a pedestal with no contact until after the appraisal has been completed. This lack of contact with appraisers has resulted in low appraisals causing significant issues in our market. It has always been my assertion that the
market price is what the buyer is willing to pay and the seller is willing to sell any product for in any market.
As we analyze our business, we see that first time buyers are representing 60% of our market; investors representing 30% which leaves just 10% for move up buyers and relocation buyers. Couple this with higher rates on jumbo loans results in making our upper price ranges more susceptible to longer marketing times and perhaps, further reductions in prices as there is a smaller pool of buyers. We continue to believe that, although there will be challenges, we are in the best real estate market in the country and will continue to be for many more years.