Recalling somewhere that home buying reaches its peak in the summer, the City Beat called up a few Grand Cities area Realtors last week to see how things were going for them. As my story says, they think it’s great and this year should end on about the same note as last year, though, it’s worth pointing out that the people that sell your homes tend to be an optimistic lot.
The numbers paint a somewhat more sobering picture. We’re about 10 percent behind where we should be to keep up with last year. That’s mostly in the number of homes sold and the volume, or total value of homes sold, which, of course, is affected by the number sold.
It may be that we were off to a bit of a late start. The ever reliable and ever chipper Jerry Youngberg from 1st Realty says the new fed lending rules means loans take longer to process, he’d guess two weeks.
Patsy Dombovy-Vasquez from Coldwell Banker and Mavis Winkels from Greenberg Realty both pointed out that the $8,000 tax credit is encouraging a lot of new homebuyers. From the news coverage, it looks like the tax credit officially went into effect earlier this month or late last month, meaning we might not see its impact until later in the summer.
Below is the Realtor data I used, courtesy of Jerry, with 2008 numbers adjusted for deflation. Notice how steady the average home prices have stayed. For lower-priced homes, I would guess there might be some appreciation, too. Since I don’t have a median value, I can’t say for sure. But that would seem a fair assessment given what the Realtors told me about the preference for lower-priced homes, which sound like it’s more pronounced now than in the housing boom, and the appreciation in the price of condos, which tend to be cheaper.
| Condo/townhome | Jan-May 2009 | Jan-May 2008 | % change |
|---|---|---|---|
| Total active | 224 | 187 | 19.8% |
| Number under contract | 66 | 66 | 0.0% |
| Number sold | 42 | 52 | -19.2% |
| Sold volume | $5,897,400 | $6,641,654 | -11.2% |
| Average price | $140,414 | $127,724 | 9.9% |
| Single-family home | Jan-May 2009 | Jan-May 2008 | % change |
| Total active | 904 | 920 | -1.7% |
| Number under contract | 325 | 335 | -3.0% |
| Number sold | 228 | 247 | -7.7% |
| Sold volume | $31,696,296 | $35,271,025 | -10.1% |
| Average price | $139,019 | $142,798 | -2.6% |
| All homes | Jan-May 2009 | Jan-May 2008 | % change |
| Total active | 1,128 | 1,107 | 1.9% |
| Number under contract | 391 | 401 | -2.5% |
| Number sold | 270 | 299 | -9.7% |
| Sold volume | $37,593,696 | $41,912,679 | -10.3% |
| Average price | $139,236 | $140,176 | -0.7% |
Let’s look at construction permits, which tells us how much inventory we’ll have later in the year. As can be expected, builders are building cheaper homes, though they still seem to be focused on the more profitable up-market homes ($236,000 for a single-family home? Who’s buying these monstrosities?):
| Amount | Value | Average | |
|---|---|---|---|
| GF single-family | 25 | $5,904,000 | $236,160 |
| Townhomes | 4 | $747,000 | $186,750 |
| EGF single-family & townhomes | 2 | $387,000 | $193,500 |
| Total | 29 | $7,038,000 | $242,690 |
Compare this to 2008….
| Amount | Value | Average | |
|---|---|---|---|
| GF single-family | 22 | $6,062,000 | $275,545 |
| Townhomes | 18 | $3,130,000 | $173,889 |
| EGF single-family & townhomes | 5 | $892,000 | $178,400 |
| Total | 45 | $10,084,000 | $224,089 |
You have to wonder who’s buying the $276,000 monstrosity from last year!
By the way, since I referenced an earlier story about how great 2008 was, here’s a few grafs from to remind you:
Grand Forks-area Realtors had their third best year of home sales in 2008, a sign that the local economy remained an island of stability in a chaotic national economy.
"That’s remarkable coming off the two good years, and we had a few good years prior to that, too," said Jerry Youngberg, a Realtor and former president of the Grand Forks Board of Realtors.
Another sign of stability was the way homes here mostly maintained their value. Adjusted for inflation, the average area home sold for 1.7 percent less in 2008 than in 2007, according to data area Realtors submitted to the board.
Youngberg said he thinks the average decreased because buyers were increasingly focusing on older homes, which generally cost less than new homes.
Nationwide, the median home sold for 13.2 percent less in November 2008 compared with the same month in 2007, breaking a record, according to the National Association of Realtors.
The value of all homes sold in the Grand Forks area totaled about $125.8 million, according to the Board of Realtors. The data doesn’t include some year-end numbers that haven’t yet been submitted.
Compare this with 2007 when sales totaled $138.8 million and with 2006 when they totaled $139.3 million. But nothing in the past 10 years even approached those levels. In 2005, the fourth highest, sales totaled about $122 million.
Youngberg said he expects sales this year to be about the same as 2008.
Have you looked at all in the market? $236,000 does not buy a monstrosity. That barely gets you past quaint! This market has been overpriced for years. Especially since the flood, but it was bad before that because of too-high lot prices.
It’s about time for prices to come down a bit. Now if we could just do something about the outrageous property taxes. That $240,000 home will cost you about $5,000 in taxes and god-forbid the city did any work in your neighborhood and you have another $1,000 in specials.
If you want a monstrocity, you are looking at $400+, although it depends on your definition, I suppose, of what qualifies as too much space.
Just wait ’til the tax credits expire in the brownstones. Those properties’ values will plummet and pull down the market. ;-)
Anon: Trying to jinx me eh? Notice how condos are appreciating in this town?
Home Shopping: I checked a local real estate Web site and for $230k, you can get a brand new 4 bdrm, 3 bath with 2,400 sq ft of space. Pay about that much for a not-new house and you get 3,500 sq ft. Cripes, what kind of house are you looking for?
We are obviously looking at this from two different perspectives. 2,400 square feet is not a lot for a family. It’s not small, but it hardly qualifies as a monstrocity. Plus there are other considerations besides size. A couple of the 7 listings (oh boy, 7!) on the MLS between 230 and 240 are twin homes. Generally, not much of a backyard. Also, I’m at the point where I would like higher quality finishes and nice landscaping. Yes, you can add these things, but they cost money. My original point was that $230K will not buy you a monstrosity. There are plenty of monster homes in Grand Forks, but you won’t come close for that change. BTW, I don’t want one of those huge homes. I could not afford the taxes, let alone the monthly payment. Yes, there are some older homes with SF over 3000, but there are so few of them that a person would have to compromise on some of their desires. I’m happy enough in my current home, so I don’t have to compromise.
I’ve been watching this market for more than 15 years, having lived in many other spots around the country, and in my opinion, homes have been over-priced. Not California over-priced, but high compared to the region.
I agree with home shopping. I have kept tabs on the local market for many years and things have slowed down that is sure with little price appreciation in the past year with some newer homes a bit cheaper than comparable homes by the same builder in 2007.
But a $230,000 home would be as the poster described an average family home newer with 2100-2500 sq ft finished. Be leary of those listing with have more than that listed as the basement or lower level is not completely finished.
We have a ranch 1700 sq ft finished on each level
(finished basement) and it was appraised late last year at 238K. It was built in 2003 and has standard finishings. For a family of 5 enough space without being cramped, but not too much. And our home is far from monstrous in size.
I agree with home shopping. I have kept tabs on the local market for many years and things have slowed down that is sure with little price appreciation in the past year with some newer homes a bit cheaper than comparable homes by the same builder in 2007.
But a $230,000 home would be as the poster described an average family home newer with 2100-2500 sq ft finished. Be leary of those listing with have more than that listed as the basement or lower level is not completely finished.
We have a ranch 1700 sq ft finished on each level
(finished basement) and it was appraised late last year at 238K. It was built in 2003 and has standard finishings. For a family of 5 enough space without being cramped, but not too much. And our home is far from monstrous in size.