I met a broker this week who is very active in the real estate market in Berkeley County. Not only does she run her own firm, she also provides consultancy work for developers and builders in Jefferson and Berkeley counties. She told me that that the market was much better in Berkeley County than Jefferson County. Is this true?

I wanted to check out the difference in the markets. I looked at the data from Multiple Listing Service for the two markets since January 2005. The results are fairly clear. Both markets have risen and fallen in tandem (see Figures 1 and 2).

Has Berkeley County done better than Jefferson County since the markets flattened out? Apparently not.  Both markets have seen rising numbers of homes for sale while the number of homes actually sold has decreased.

In July 2007, there was over 18 months inventory of housing stock available in Berkeley County. In Jefferson County there was a little over 15 months. You could argue that homes are selling more quickly in Jefferson County.

In Jefferson County, it took an average of 112 days to sell a home in July 2007. This number was 119 for Berkeley County. About the same, both numbers being equally appalling.

In Jefferson County the average home-sale price has dipped in only one of the past three months compared to the year before. For example, it was slightly higher—one percent higher—in July 2007 than in July 2006. There was no such good news for Berkeley County, which saw a drop in average sale price for homes sold in July 2007 compared to the same three months in 2006. This culminated in a 17-percent drop in average home sold price for July.

Perhaps most revealing, in both Jefferson and Berkeley counties there were three times more homes listed for sale than homes sold (333/99 for Berkeley County and 143/48 for Jefferson County.)  This is terrible news for sellers trying to find buyers for their homes. The supply of properties for sale is increasingly outstripping demand.

Does it looks like these two markets are linked? Of course they are. The main reasons for the downturn in the market originate well beyond the Eastern Panhandle. To restate the words printed often in this column, the causes are high interest rates, rising gasoline prices, the collapse of the sub-prime market, and the evaporation of the real estate investor. All of these reasons influence both counties, hence the similarity in their market statistics.

One worry is that in 2005 and 2006 the number of homes sold peaked in the middle of the year and fell toward the end of the year. This seems to be happening in 2007 in both counties. Again, not great news for those trying to sell their homes.

To answer my friend from Berkeley County: No, the Berkeley County real estate market is not doing better than Jefferson County’s. Both markets are stinkers. In the same vein, once the macro conditions change—most probably as a direct result of a reduction in the Federal Reserve’s federal funds rate—things should pick up in both counties.

However, methinks the chairman of the Fed wants a few equity firms and hedge funds to suffer a bit more, to feel the pain of risk to the full extent, before any relief is ushered forth. In the meantime, don’t hold your breath.