The total closed sales of Rutherford County residential real estate continued their steady rise with July 2008 posting the best numbers of the year so far with 412 closed sales, off just 24 percent from July 2007. Not only is this the first month of the year where our sales were off less than 30 percent from 2007, the numbers look promising for August as July 2008 pending sales were down just 20 percent. For the year, the market is off about 32 percent compared to 2007.
If Rutherford County can maintain the sales pace established in July, our current residential listing inventory of 2,641 homes would represent a supply of just 6.4 months. Even if we base this supply number on the average number of sales per month from May-July, our inventory is still a hair under 7 months at 6.98.
Another sign that the Buyers Market is becoming more balanced is July’s 7.1 percent drop in average closed residential sales price, going from $186,593 in 2007 to $173,260 this year. As we discussed in last month’s market report, sellers have to become more realistic or remove their homes from the market if the listing inventory is going to be cut down to more manageable levels. With July’s dip in average sales price, this is exactly what appears to be happening.
Once the market becomes more balanced (when available inventory falls to 3-5 months), buyer and seller confidence will increase which will, in turn, lead to rising prices once again. Until that confidence returns, however, downward pressure on prices will remain.
One area we will be keeping a close eye on is the impact the recently passed Federal housing legislation will have on the Rutherford County market. The new tax credit for first time home buyers (defined by the law as any person or married couple who has not owned a home during the past three years), may be an incentive for some people to buy homes who otherwise would not. However, we have legitimate concerns about how the market will respond to the raising of the required down payment on FHA loans from 3 to 3.5 percent and the elimination of down payment assistance programs as of October 1.
We will be watching carefully to see if these unexpected challenges for buyers–especially in the affordable home market where potential purchasers tend to have less cash at their disposal than other buyers–result in a significant portion of the prospective buyer pool drying up at the end of September.
If you need down payment assistance in order to qualify for a home, please call us today so we can help you get into a home before these programs go away. If you were planning on selling your home in the second half of 2008, we encourage you to strongly consider listing it as soon as possible so those who require down payment assistance will be included in your pool of potential purchasers. This advice is even more vital if the home you want to sell falls in the affordable range.
As always, we are always available to answer any and all real estate questions. Just give us a call at 615-867-3020 or visit our website.
