October numbers are in and it’s looking like we may be slowing to "flat", rather than a steep decline. There were 5,263 single-family closings in October. This is only 1.8% below the same year ago period. After lagged closings are reported we will be up. Not as much as the first 9 months of the year, but up is good. "Up" means we have enough consumer confidence to want to buy a home. "Up" means that even after high gas prices, a major Atlanta company going bankrupt (Delta), and political unrest over International agenda that we are still buying homes.

Maybe after 9/11, Iraq, and just how many hurricanes (?), we have learned that as long as there is low employment and low interest rates we will still buy homes. My regression models through the years have always indicated that these two variables alone are the most influential in housing. With that said we know what has to remain low for housing to be and remain attractive. Back to the numbers.

Condos and townhomes will have a year-to-year increase for October, but may also experience the second non-double-digit increase this year. We had the largest 2005 year-to-year increase in September at 39.3%, while October is only up 4.1% before lagged closings are reported.

The average sale price for detached single family in October was $255,675, while it was $183,800 for condos and townhomes. A slow down, even though just flat, should slow down price appreciation. However, we have had an incremental drop in inventory, so for the short term we should still see some appreciation, but not as great as the first nine months of the year.

There were 4,299 expired single family listings in October. This is our 10th straight decline, while there were 1,547 withdrawn listings for all single family or the 15th straight year-to-year increase. Days-on-market for condos and townhomes was 86.3 and 77.5 for single family detached. Both results were about a day less than October 2004.

An interesting statistic formed in October, new versus resale inventories. Single family detached ended October at 7.6 months-supply for new construction versus 7.4 last month. However, single family detached resales ended October at 6.2 versus 6.3 last month. New construction supply went up, while resale supply went down. In a declining market this is not uncommon, as "greater value" resales start looking better.

Condo and townhome months supply of inventory was 7.1 for new construction and 9.7 for resale. Last month it was 7.3 for new construction and 10.0 for resales. This the first time in over three years we have been below 10.0 for condo and townhome resales.

This was an encouraging reporting period during uncertain economic times. Let’s hope it continues for the rest of the year and have a great Thanksgiving holiday.

Thank you,

Steve Palm
Smart Numbers