I’m repeating this graph because it’s all about the last quarter now. If you are watching the stock market today, (and who isn’t) you know that yesterday doesn’t matter anymore. Right now we’re waiting to see if a “Black Friday” or a “Black Monday” or both as we experienced many years ago, can turn into a Black Monday, Tuesday, Wednesday, Thursday and Friday.
The reason I started Sunday Night Stats back in early January of 2008 was to help people pinpoint a trend. Well if you haven’t gotten the picture as to the trend by now, Sunday Night Stats isn’t going to help you.
To buyers and sellers of real estate, and agents advising buyers and sellers of real estate, all you need to know today is that September performed as expected. If you take the brown line as to median price above and draw it equidistant from the 2006 or 2007 line, you will be exactly at where we are, $377,000. Who cares. What we care about is which way that line is going from here.
Look up at that chart and what happened to median prices from October through year end in all the previous years shown. Now look at the stock market. If the stock market is an indicator of consumer confidence, and I believe it is, then we will not see a repeat performance in the last quarter of 2008 as to median home values. Instead we will see the brown line trending down toward 2005 prices. In fact, if you have a house on market that you bought in 2005, and you can break even today, consider yourself to be very lucky indeed and DO IT!
Going back to my Prediction post “My price predictions are: $429,000 for the 2nd quarter of 2008 $400,000 for the 4th quarter of 2008”, I am right on target with the September median at $413,000 and the 3rd quarter at $425,000. The graph above is the median on a combined basis for Single Family and Condos, hence the variance between $377,000 this month as to the graph and $413,000 in the sentence before this one. At this point, and hitting my refresh button on the Dow as I write this post, I think we’ll be damned lucky to see the median fall to only $400,000 by year end, per my April prediction.
Usually I talk to buyers and sellers of real estate and to real estate agents. But the handwriting on the wall today is to the people who are planning to spend 2009 real estate taxes. DON’T EVEN THINK ABOUT IT! The market crisis is all about who didn’t see the handwriting on the wall, and who needed to see it. Today that message goes out to anyone who thinks the new assessment values are a means of increased revenue. The appeals are going to hit you so fast your heads are going to spin. In fact, save yourselves the expense of receiving and evaluating those appeals and revise your numbers before you solidify the 2009 real estate tax increases. If you come up with a budget for spending 2009 real estate taxes based on the valuations everyone received in the mail, you will have no one to blame but yourselves for doing that when the scream and shout hits the fan.
It’s too early to talk about YOY volume, we’ll do that next week. Today it’s all about expectations as to value, and I expect the 4th quarter to slide down toward that green line of 2005 vs. the trend of the last three years. I don’t think it will hit the green line by year end…but it’s going to get pretty darned close.
(Required disclosure: Stats in this post are not compiled, verified or posted by NWMLS…never are; never will be. I do my own stats and no one is responsible for them but me personally. Sorry to have to repeat this disclosure every freakin’ week…but unfortunately it’s required.)