Back in  January I predicted that the market we were in then would be the market we would be in all year. While there has been some improvement, demand for housing purchases remains subdued. One bright point is that the lower end of the market seems to be having a pick-up in activity because of the Obama stimulus first time buyer credit. As more entry level houses are bought, the owners selling them can puchase their next home so this is good news for everyone.
So how are things doing in our neck of the woods?

Below is my current analysis of the Sudbury MA housing market as of June 2009:

Monthly Units Sold: there is very little activity compared to even 2007, which was not a banner year. The bright note is that what activity there is seems to be steady and trending slowly upward. The market environment is still unbalanced with too much inventory. Even though Sudbury continues to be a desirable town, the recent increase in interest rates and tightening of down-payment policies continues to shrink the real buyer pool, and prices will need to fall in order to sell all the homes that are currently on the market.

Selling Price to Original Price Ratio: The reality of this market has made even the most out-of-touch sellers get with the program or get out of the market. The ratios this year are all over the place (probably due to a low number of sales on which to base the statistics) but have remained just a bit below their historical averages. For the past 3 years, across the entire price spectrum, the average SP/OP ratio has remained consistently at 91%, that is, the houses that did sell, sold at an average of 91% of what they originally put it on the market for. You’ll see a spike in April, but that is due to the sale of a single new McMansion that with added extras exceeded the listing price by hundreds of thousands of dollars, not statistically a repeatable event. As I’ve always said, we all know the laws of supply and demand. With fewer buyers due to economics and mortgage restrictions there are not enough shoppers to buy all the inventory. Obviously then the most attractive and best valued houses are the ones that will sell.

Monthly Average Sales Price: Studying this chart we see that over the first half of this year, the greatest demand is again coming from the smaller homes - incomes match better with the prices of smaller homes and the Obama credit coupled with price reductions has obviously gotten buyers excited. As the year has gone on, we see more homes in the mid-range selling, partially due to the inevitable movement of foreclosures and short sales up into this price point and even above. The spike in April is again a fluke due to one very high value home sale.

Days On Market: the trend is almost parallel to last year’s, but slightly lower, which is very encouraging. I think this has again been more a function of “High-Quality” houses coming on the market and selling while sellers who would like to sell but are waiting on the sidelines than increased demand.

POSSIBLE IMPROVEMENTS IN THE MARKET: The big question on everybody’s lips (especially sellers with great houses that are staying on the sidelines) is now not “When Will Prices Hit Bottom?” but “Have Prices Already Hit Bottom?” The supply probably has to decrease yet more until there is some competition among buyers for a property before price stability becomes a reality. What we probably can look forward to in the near future in Sudbury is a gentle bottoming-out in late 2009, possibly even delayed to the first quarter of 2010. Average sales prices will fluctuate a little just as they have over the past several months. Home sales will continue around their present rate for the coming months and sellers who price their homes for sale at fair market value will sell them reasonably quickly, say in 45-120 days.

The Bottom Line:
For sellers, the near future may continue to present challenges, but the market could start stabilizing this year and if you have a desirable house properly priced, selling it is going to get a little easier. For buyers, if you know for sure that the market has bottomed you’ve probably already missed it, and this is a GREAT time to buy.
If I can be of help to you in buying or selling a home in Sudbury give me a call at 978-580-1069.

Welcome to Mike Hunter’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Sudbury.