December 2008 Market Update
When looking at December home prices for the Huntsville Metro Area we find that the average sales price this month was $86 Sqr/Ft, while December 2007 prices averaged $91 Sqr/Ft, indicating a year-over-year price depreciation of -5.5%.
When we couple this month’s result with that of October (-2.2%), November (-2.1%), and realize that prices have moved below their moving average trend line since September 2008, it is an easy leap to conclude that average Huntsville Home Prices are weakening, especially when considering our market’s point of reference is a previously steady multi-year history of price appreciation as illustrated in the following 3 year price chart.
However before we reach such a conclusion, it is important to take a closer look at these statistics because recent market dynamics are much more complex than can be illustrated in this simple chart.
First of all, the Huntsville Real Estate Market has shrunk and it now smaller than in recent years. Moreover the mix of homes that are being sold has shifted dramatically. For example, in December the number of homes sold around the $1o0k price point increased some +21%, while at the same time the number of homes sold above $300k has decreased some -40%. Given that we are looking at a simple average home price, we would expect to see numbers similar to what we are seeing based on this market shift alone and it does appear that this factor is the major mover of average Huntsville Home Prices.
To illustrate the diverse and dynamic market we are now experiencing lets look at a couple of charts related to price-range and location within the metro area.
|Price Range||2007 Price||2008 Price||Price Change|
|400k – up||$129||$134||+3.9%|
Given the above chart and the statistics of the past few months, we can conclude that not only are lower-end unit sales growing but prices are declining, median priced home sales have slowed however their price has remained stable, and while upper-end home sales have declined dramatically their prices have remained strong. It is not a coincidence that where we are seeing lower prices, unit sales are increasing and vise-visa.
Whether a buyer or seller, your price range will be a major contributor toward what type of Huntsville Real Estate Market you can expect to encounter, but your location of interest will also have a major effect. We are seeing average price appreciation in some parts of the metro area, while at the same time experiencing price depreciation in others as illustrated in the following chart:
|MLS Area||Sales Price Sqr/Ft||Price % Diff||Unit Sales
||Sales % Diff||Months Of Inventory|
|Metro Area Totals||$86||-5.5%||218||-29.9%||10.34|
So back to our original question: Are Huntsville Home Prices Falling? The answer is a complex one with no clear Yes or No, the answer is clearly dependent on the particulars of your market segment.
This market analysis post is likely the most complex we have ever publicly presented and is of course not for the casual reader, however given the complexity of the current real estate market it seems warranted. Our feeling is that this market does indeed represent some huge buying opportunities, but there are also perils to be navigated, thus it is far better to have well informed clientele than to simply gloss over any bad news that comes our way.