Market Update December 2008

While pending sales were much slower in October (compared to 2007), November was a stronger month with 53 homes going into escrow, which should result in a very similar # of closed sales as December 2007. Oddly enough, the average sales price in November (for the homes that closed escrow) was $1,200,000 which is significantly higher than most of the last 12 months. That most likely resulted from a shortage of inventory in the lower price levels where much of the buyer activity is. I think many buyers took big hits in the early Fall with the stock market, but now have recovered from the loss (or at least come to grips with it) and are stepping back into the market to take advantage of the extremely low interest rates (near historic lows!). The average days on market time for properties that are currently in escrow is around 90 days and for those that closed escrow was closer to 60 days.

All-in-all, what we're seeing is it comes down to price. The sellers who are being realistic and are pricing their homes correctly are selling their homes relatively quickly to great buyers. The buyers left, because of the tightened lending requirements, are more serious and better qualified that buyers in the past, so you also have to deal with less showings while still reaching those "strong buyers" that are most likely to pull the trigger. That said, buyers are still being cautious as we don't know if we have "reached the bottom of the market" or are still declining. Buyers are looking for strong values and are shopping hard to find the right property. The market has a whole is down about 11% as far as Number of properties sold and about 15% (w/o Montecito/Hope Ranch) as far as Median and average sales prices. That doesn't mean prices have softened 15% in the last year (though they probably have softened 10% or so), but more that the market activity is occurring more on the lower end of the market which is pulling those numbers down.

If you want to see more specific numbers and data on what the market is doing, give me a call at 805-637-7148 or email me at Daniel@ZiaGroup.com