Friday, October 27, 2006

The Gap is Widening but...

This is a good news/bad news posting. First, the bad news. Total sales year to date in Westport is starting to lag behind the 2003 sales that I had mentioned in a previous posting. The 339 single family sales is off less than 1% off of 2003 sales. We had been very slightly ahead of those figures a month ago. However, when compared to more recent statistics, this total represents a drop of almost 20% when compared to 2005. Prices are still showing higher numbers than last year, but I believe this to be a misleading statistic. A number of properties that sold in 2005 which have come back to the market for resale have sold for less than the previous year, thus indicating that prices have effectively decreased.

The good news is that the inventory has been slowly decreasing. We now have 355 listings in Westport compared to a high of 396 on June 19th. There has also been a small flurry of activity leading to binders, which if they close this year will help to bridge the gap. Alan Greenspan just announced that he believes that the Real estate market has seen the worst. We shall see...

The Weston Market, which has been remarkably consistent in the previous 3 years is off 30%, and the gap there is likely to widen before year's end. Though inventory has also markedly decreased, the number of sales has been meager at best since August.

I still have the feeling that there will need to be a change in buyer/seller motivation in order for the pendulum to swing in the opposite direction. I am encouraging buyers to consider acting now, rather than waiting too long. The reasons for that are twofold. One, interest rates have recently come down, and it is difficult to predict how long that will be the case. Secondly, I expect that when this market begins to turn sometime in 2007, it will shift again to more of a seller's market. At that point, I expect that prices will begin to rise again.


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