Some say the real estate market in Jefferson County is slow. Some say the market is on the edge and headed for a deep dive. Some say the market has been bad, but is leveling off. Everyone seems to agree that real estate in 2007 is bad, but how bad is it?
Take a good look at the graph below. The graph illustrates the number of residential homes that have sold in Jefferson County in the first four months in each of the past five years. Clearly 2007 has the lowest number of homes sold than any of the other years in the graph. Indeed, January through April 2007 has seen home sales that are 20 percent lower than 2006 and a whopping 40 percent less sales than the same period in 2005.
If you thought that was fairly depressing, what about this? In April 2007 only 43 residential homes sold in Jefferson County. During the same month 193 homes were listed for sale. That’s a ratio of one home being sold for every five being listed.
Since January 1, 2007, only two lots have sold in the 25443 zip code. In Jefferson County only 20 lots have sold since the start of the year. There are currently over 230 lots listed in the county. That is a whole lot of dirt waiting to sell, with few buyers anywhere in sight.
And there is more bad news. After seven months of falling inventory—homes listed for sale—we have seen two months of increases in inventory. This is not that surprising given that many sellers will want to hitch their wagon to the “spring pony.” But folks, this pony just ain’t walking!
Little change in the market is likely unless one of the following occurs. First would be the Federal Reserve reducing interest rates. This is unlikely in the short term, with concerns over inflation keeping interest rates in check. Second would be a swift and positive end to the war in Iraq, lifting the overall economy. We all know that is not going to happen any time soon. Third, sometimes the election of a new U.S. President gives an emotional boost to the economy. We have to wait until January 2009 before that pony is let out of the stable.
Last month I ended my column on a fairly positive note, predicting that sales would increase slightly in the near term. So far I haven’t been proven right—though sales have nudged ahead slightly. However, a look at the number of contracts that were signed in March (62) and April(63)leads me to predict that the number of homes that will close over the next few months is going to increase.