Market Update _march 2009

Greater Lake County Real Estate Market Update Updated March 2009 If you remember the last update I sent out (August 2008), I claimed we hit the bottom of our local real estate market and our market was on the road to recovery. Very shortly after I sent that market update out…the stock market came tumbling down and crashed sending everybody in the country into hiding. Consumer confidence and consumer spending came to a screeching halt. The numbers you see below are a refection of how the market has recovered since then and how consumer confidence is coming back and so is our local real estate market. Remember our real estate market is like a championship boxer…we can take a pounding but we will always get back up!!! Number of Transactions Per Month 700 600 500 400 300 200

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100

There were 252 transactions that occurred in March 2009. This is a 10.5% increase in transactions as compared to my last market update in August 2008 (228), and a 44.8% increase in transactions compared to January 2009 (174). I remain cautiously optimistic that the number of transactions will continue to increase over the next several months.

Average Days on Market

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160 140 120 100 80 60 40 20

The Average Days on Market for the most part has remained steady with no real movement up or down. As of March 2009, the average DOM (days on market) is 133 days. This number is slightly higher than August and January’s average of 130. The important thing to remember is pricing and condition. In our current real estate market, we are in a pricing war and a beauty contest. Those sellers that are insisting on the highest price for their homes need to be prepared to wait it out. There is still a mountain of inventory creating competition. A healthy market usually averages about 90 days +/-.

% of Sales to List Price 100 98 96 94 92

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90

The % of Sales Price to List Price is another indicator that has remained somewhat flat over the last year at around 92%. This means sellers who sold their properties during this time period, sold those properties on average, for 8% less than what they were originally asking for the property. I don’t see any real movement in this indicator over the next six months to a year. Inventory of Listings 6500 5500 4500 3500 2500 1500

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500

This is the really good news…our current inventory of properties being offered for sale is 5,099 properties. Folks, this is an 8.37% decline in inventory since this time last year (Mar 08 was 5,565)!!! This is actually the lowest level our inventory has been since March 2007 (5,028). This number needs to continue to drop in order to get home values to level off and start to appreciate again. Absorption Rate (Months of Inventory)

36.00 31.00 26.00 21.00 16.00 11.00 6.00 1.00

Months of Inventory is a new indicator since my last update. I wanted to put inventory levels into perspective and at the same time being able to visualize 5,099 properties. In our local real estate market we have 20 months of inventory. What this means is, if there were no more new

listings added to our inventory and we continued to sell properties at 252 homes per month…it would take roughly 20 months to burn through the existing inventory. Now the good news, at the end of March 2008 we had 21.5 months of inventory and by the end of 2008 the count grew to 30.7 months of inventory. Due largely to the stock market crashing and everybody pretty much shut down during the fourth quarter of 2008. I’m very proud to say that since then we have reduced our months of inventory by over 34%. Keep in mind that a healthy market consists of approximately 8 – 12 months of inventory so we have a ways to go, but we are heading in the right direction. Averge Sales Price 300000 280000 260000 240000 220000 200000 180000 160000 140000 120000 100000

Average Sales Price is where we are going to continue and struggle to maintain until inventory gets to a normal level. The good news is that we have rebounded since January 2009 to an increased average sales price of $155,000…a 10.6% increase!!! We will get there… I hope you find the information I have included informative. If you have any questions or need further explanation, please don’t hesitate to contact me at (352) 504-0055. Thomas D. “Gus” Grizzard, CCIM Broker/Owner ERA, Tom Grizzard Inc