Remember 2007? The good old days when real estate values in Catawba County were reaching an all time high. Back when getting a loan was painless and everyone qualified for something. Back when you could borrow as much or more money than your home was worth.
In 2011 those that purchased or refinanced property at the peak of the market are faced with a harsh reality. Their property is likely worth less than what they paid for it. Less or little more than what they owe for it.
A glance back at Catawba County’s real state market for single family “stick-built” homes in 2007 shows 1327 sales with a sales volume $232,550,258.00, an average sales price of $175,245.00, a median sales price of $140,900.00, and homes sold after about 129 days on the market.
For comparison the first ten months of 2011 has produced 651 sales with a sales volume of $99,307,284.00, an average sales price of $152,545.00, a median sales price of $122,000.00, and homes sold after about 179 days on the market. Of course there are still two months left this year, but there is no reason to anticipate November and December sales will significantly improve 2011’s numbers.
Based on the number of homes sold during the first ten months of 2011 there is enough existing inventory to supply the demand through most of January in 2013. That’s if none are added.
The the fair market value of the average home in Catawba County has declined about 13% since 2007.
So what does all this mean?
To buyers this means they are clearly in the driver’s seat. Nonetheless, finding a fair market value won’t be easy. The staggering inventory level suggests most sellers have no immediate need to sell. Others simply can’t afford to sell their property for what its worth. Buyers will continue to face competition from other buyers for the few attractively priced properties.
To sellers it means times are tough. In order to succeed at selling their property they will likely settle for less, some considerably less than what they had hoped for. They face competition from others like them and increasing competition from lenders including banks, credit unions, and government sponsored entities. In 2007 lenders disposing of properties they acquired through the foreclosure process accounted for about 6.31% of Catawba County homes sales. In the first ten months of 2011 the market share for these “bank owned” homes was 17.72%. That might sound bad, but it’s worse in some adjoining counties.
Historically low interest rates favor both buyers and sellers. Whether it’s increasing the purchase power of qualified buyers or providing qualified home owners the opportunity to replace or restructure their existing mortgages, low interest rates make home ownership more affordable. Perhaps one day we will look back at today’s interest rates and realize, those were the good old days.
Data contained herein is from the Multiple Listing Service of Catawba Valley, a wholly owned subsidiary of the Catawba Valley Association of Realtors®. Opinions expressed are solely the opinions of the author and are not the opinions of the Catawba Valley Association of Realtors® or its membership as a whole.