Housing sales...a glint in the gloom

February 14, 2009|By ARNOLD S. PLATOU

A comparison of housing deals

WASHINGTON COUNTY -- Housing sales in Washington County dipped to their lowest level in several years in 2008.

Sales fell 25 percent to $218 million, compared to $291 million in 2007, according to The Herald-Mail's analysis of data from Metropolitan Regional Information Systems Inc.

The market is barely a third of 2005's $578 million.

But there is a glint of good news in the gloom.

The rose in the weeds is small, but noteworthy because it stems from the same kind of good news that excited financial markets nationwide early this month.

Across America, a key indicator of future home sales increased in December for the first time in several months, according to the National Association of Realtors.


In Washington County, according to a Herald-Mail review of data, the percentage of pending sales not dependent on first selling the buyer's home climbed in December to its strongest point in all of 2008.

"It's fantastic news. Absolutely," said Joan McLernon, president of the Pen-Mar Regional Association of Realtors. "It means there are more (kinds of) buyers out there. ... They're either a first-time buyer, a renter who maybe owned before, but is renting now, or somebody that has the ability to buy more without selling property they own first."

But it's far from clear whether that bit of sunshine counts for much amid the overall gloom in the latest data about 2008.

Sales slump

Overall, 2008 was a bad year to try to sell a house here.

Just 1,005 houses were sold. That's nearly 200 fewer than were sold in 2007 and less than half the 2,254 sold during the boom of 2005, which remains the county's peak year.

Not only that, but in 2008, it took a lot longer to sell houses as credit standards tightened, consumer confidence fell and the unemployment rate increased.

On average, it took 164 days - 5 1/2 months - to reach a sale last year. By comparison, it took just 50 days to make a sale in 2005.

The $218 million in sales of single-family homes and condominiums last year was the county's lowest since 2001. In that pre-boom era, the $192 million in sales that year was cause for celebration.

As the market fell in 2008, so did prices.

In fact, both the average price and the median price were lower every month of 2008 compared to that month the previous year.

Price trends are watched both ways, but the median price generally is considered to give a more accurate picture of what's happening.

"In general, median price is preferable to using average sales price, which can be skewed upwards by a few costly homes," according to, a California Web site designed to teach children about the world around them. "Median price," on the other hand, provides a measure of the midpoint of house sales, the Web site said.

Metropolitan Regional Information Systems Inc. (MRIS), which uses reports from area real estate agents, said the median price of a home sold here in 2007 was $220,000.

In general, that means half of the houses sold here that year went for more money and half for less.

MRIS is calculating such figures for 2008 now, and won't have Washington County's ready until mid-February, a statistician said.

Looking at the monthly reports, it seems clear 2008's median price will be lower than 2007's.

In January 2008, for instance, the median price of homes sold was $186,500. It went as low as $160,000 in December, and rose above $220,000 - 2007's median price - only in June. It was $227,250 then.

As for the average selling price, it was $243,255 in 2007, MRIS said. According to Herald-Mail calculations, it fell to $217,717 in 2008.

A good sign

In the first week of February, the National Association of Realtors (NAR) issued a report that excited stock market investors.

The Dow Jones industrial average jumped 141 points on Feb. 3, reversing three days of declines, after NAR announced its so-called pending home sales index increased in December.

The index, based on contracts signed by would-be buyers, helps officials forecast sales likely to go through within two or three months.

The latest reading, based on contracts signed in December, rose 6.3 percent over November's, NAR said. December's reading is 2.1 percent higher than in December 2007, NAR said.

"It's the first increase that we've seen since last summer and, with this slowing of the economy, people are beginning to see this uptick in demand," said Ken Fears, NAR's manager of regional economics.

Lawrence Yun, NAR's chief economist, said the gain was spurred by lower prices and mortgage interest rates.

At the same time, NAR's housing affordability index rose 10.9 percent to its highest point since tracking began in 1970, the association said in a press release.

"Significant uncertainty still clouds the housing market despite improved affordability conditions," Yun said. "For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers."

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