Thursday thoughts – 2 February 2008

1 – I wonder if local builders will employ these tactics?

As the housing slump drags on, some builders have a deal for potential buyers: Sign a contract, and if the cost of comparable homes drops before closing, you get the lower price.

2 – Localizing the national pending home sales index for Charlottesville/Albemarle –

2007 – 80 residential properties went under contract – 22% fewer than 2006.
2006 – 103
2005 – 112
2004 – 137
2003 – 103

For a better analysis visit CR, with the fun quote – “The NAR forecasts are always amusing. The recovery is always just around the corner!”  Can’t you just smell the credibility?

3 – Good job, Northern Virginia Association of Realtors. Way to alienate your members. There is always an alternative.

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  1. Scott February 11, 2008 at 10:51

    Hi Jim –

    Here’s the real question: how much of the cliff is hidden in averaging the sales over the course of the year? That is – for those 80 sales, how many took place during the first two quarters – pre-credit-crunch?

    The recovery will hinge nearly entirely on restoring access to credit. Credit will not become accessible until true affordability comes back into the picture – when housing prices are more realistically in line with income, then we’ll see a ‘recovery’.

  2. Jim Duncan February 11, 2008 at 10:55

    A clarification – those 80 are ones that actually went “under contract” – not closings, so it’s a better measure of real, timely market activity.

    The recovery also needs to have increased consumer confidence – confidence that purchasing is better than renting.


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