Sales Holding, Prices Falling

Hi! I'm Judi Stull, team leader of Judi Stull & Associates at RE/MAX Advantage Realty in Columbia, Maryland. In order to help our clients and the community learn more about the market (since I am asked about the market wherever and whenever I happen to wear my nametag - my personal favorite being the line in the Ladies Room!) I thought this would be an excellent way to tell people about the market conditions!

According to the NAR report "Home Prices Expected to Fall for Remainder of 2006" published on September 13th, after five years of continuous growth, we are looking at a more balanced market now. The fall of prices is expected to continue to have "a limited fall throughout 2006."

House prices are still having a national appreciation of less than 1%, instead of the double-digit increases of the past few years, according to Thomas M. Stevens, NAR President. Here in Howard County, we're seeing a little bit different story. Our Howard County Association of Realtors' Market Report for August shows an Average Sales Price in August 2005 of $475,082 which rose to an Average Sales Price for August 2006 of $496,244 or a 4.45% increase, a good jump over the National Average. However, this follows a 2005 increase of 16.82% and an 18.67% increase in 2004, so it just doesn't seem all that great.

Another area of note is the Absorption Rate increase from past years. In Howard County, Maryland, we have been averaging about 2 months supply of houses listed as active on the market for the past few years. The National Average for August showed 7.5 months worth of inventory available. This past month for Howard County, in August, we had 5.68 months worth of inventory. That means that if not one other house was put onto the market after the end of August, we could still sell houses at the current rate for nearly six months without running out. Of course, that's the simplified version, but you can see how that would cause re-thinking of how to price new listings!!

The good news is that according to NAR's statistics, 2006 is still on track to become "the third highest sales year on record" - houses are still selling, they just aren't appreciating at the rate we've become used to seeing. The definition of a Balanced Market is when there is a 6 month absorption rate, so we're right at that mark here in Maryland. According to the NAR report entitled "Existing-Home Sales Holding at a Sustainable Pace", Single-Family home sales "held at a seasonally adjusted annual rate of 5.51 million in August, unchanged from July, but were 12.3 percent lower than the 6.28 million-unit pace in August, 2005." Regionally, however, in the Northeast area, sales "rose 1.9 percent to a pace of 1.07 million in August, but were 11.6 percent below August 2005."

So, all in all, our area here in Maryland is staying just above the National Average in terms of Sales Prices and units sold. Our inventory isn't as high as the National Average and our days on market days are shorter than many areas. It is a different market than we are used to and we will need some to time to adjust - marketing will be different, days on market will be a bit longer. Our team absolutely relies on referrals from past clients and our A+ Client Group and I can see that this will become an even more integral part of our marketing effort in this next year. If you or if you know of anyone who would like this type of information about the area, give us a call or send us an email - we'll be happy to include you and them in our Client Appreciation Program where you can receive this type of information and service regularly.

If you would like copies of any of this information or the reports quoted, please feel free to contact me at blog@judistull.com or at our office (410) 740-1200 x 1111.

It's a Good Life! - Judi