There were 274 new listings Thursday and 227 sales, for a sell/list of 82.85%. Of the sales 26, or 11.45%, went over list.
Average list price of the sales was $536,409: average sales price was $523,127, a difference of $13,282, meaning the average sale went for 2.17% under list price. Average days on market to sale was 39.
There were 62 price changes, of which 4, or 6.45%, were increases. The average original list price of price changes was $597,399; the average new price was $571,000, a difference of $26,398, meaning the average price change was -3.05%.
The volatility we’ve seen in the stock market seems to have shown up in a higher than average price reduction and sale under list percentages (those are usually in the 2% and 1% range, respectively).
Inventory in my target area dropped 11,244, while over 90s also dropped, reaching 2,286, a percentage of 20.31%.
0.52% of all active listings in my target area had their prices reduced Thursday. The 14 day rolling sell/list dropped to 89.59%.
The real estate market and the stock market often get compared on this blog. One clear difference is that real estate is less volatile, or perhaps more accurately, less liquid. The two sectors are clearly related, however, as the US sub-prime challenge indicates. The European Central Bank, the BoC, and the US Fed all injected funds into the economy yesterday in an attempt to counter the credit crunch challenge.
I think the reaction of the central banks is very important. We’ve been awash in cheap money, globally, for several years now. Asset prices have risen, economies have caught fire, and inflation, by and large, has been kept under control. But change is the only constant, and the future is far from certain. As soon as there appears to be agreement that inflation (the result of easy credit) is the danger to be addressed, the pain of addressing it prompts an easing of credit. The reason is straightforward: taming inflation is a scenario where the cure can easily be worse than the disease. A great cure for inflation would be a depression, but who wants one of those? The goal, after all, is to stay between the ditches, not pick which side of the road to drive off of.
The fact is that stock market volatility and favourable credit are good indicators for real estate. Depending on how you finance it, a little inflation doesn’t hurt real estate either. I don’t think anyone can really deny that. But, we are living in interesting times. The dollar is flirting with parity (deflationary) but even a cursory at your wallet seems to indicate that inflation is higher than the regularly reported levels. Change is the constant. Can the central banks keep us on the road?