2008 Market Summary

2008 was the year that saw significant market corrections across most of the country. Housing prices that seemed like they could only go up a few years ago have declined by as much as 50% in some of the real estate markets across the country. Misguided congressional legislation and poor regulatory oversight led to private market lending practices that fueled an unnatural and unsustainable housing bubble that finally burst this year with far reaching consequences.

The big years for Capital Region homeowners were 2003-2005 when annual sold and closed units were at the highest levels, seller’s realized the highest percentage of their asking prices and sold homes were on the market for the shortest periods of time. Average home sales prices increased 42% during those three years alone.

The good news for us is that the Capital Region, and more specifically Albany County, has so far fared pretty well comparatively speaking. The most notable occurrence was the number of closed single family homes declined last year to 2097. Over the last 10 years, closed single family home sales in Albany County have ranged from 2008’s low of 2097 to 2004’s high of 2817, averaging 2535 each year. So we were off some 16% from the average in sold and closed homes during 2008. Unlike most parts of the country, however, prices in the Capital Region appear to be holding. The average sale price in Albany County last year was $236,000, the same as 2007. Seller’s averaged 97% of their asking price in 2008, down slightly from 97.5% in 2007. Average days on the market for the homes that sold was 66 which was the same number as 2007.

Despite the fact that 30 year fixed mortgage interest rates during 2008 were between the low 5% and high 6% range, historically low rates, there were fewer home buyers in the market place last year. Almost 4 out of every 10 houses listed last year did not sell. The houses that sold were the ones that looked the best and were priced the best of all the houses in that price range.

As we look forward to the coming year, one thing to keep in mind is the average selling price in Albany County has increased approximately 75% since 1999. It is likely that the real estate market we saw from 2002 to 2006 was the aberration not the norm. We are starting the year with very low interest rates which may even decline slightly in the first quarter and assuming consumers regain their confidence this year, 2009 will not be a repeat of 2008, but rather more like the norm…stable demand and stable prices. If consumers do not regain their confidence in 2009, however, then this year will look more like last year and we may see some decline in prices.

Market Update

Happy New Year to all! Sold and closed single family homes in Albany County during December 2008 numbered 154, up 22 units from last month and down from last December's total of 176. Average selling price of the homes that sold was $233,387 and seller's were averaging 97.3% of their asking price in an average of 72 days on market.

December's pending contracts were 83 compared to 1168 homes on the market indicating a 14 month supply of homes at this rate of sale. December is traditionally a slower month and we would expect the pending contracts of sale number to pick up in January and February.