The first six months of 2008 have shown that the Montgomery area is way behind prior years when you look at the number of homes sold each month.  2006 and even 2007 kept pace with 2005.  2008 saw home sales fall off significantly :

Here is a look at the percent change in the first quarter when comparing the same month to the prior year.  We are still in a buyer’s market in Montgomery, to be sure.  In fact, the trend in 2008 has been towards a more extreme buyer’s market.  In the first 6 months of 2006, we only had one month (April) that did not beat the prior year. In 2007 we had the beginnings of a downward trend.  As you can see below, in 2008, every single month has been lower when compared to 2007.  Drops like this that are in the range of 30% are huge.  Remember this feeling, this is what it feels like to be pushing to a buyer’s market.

If we look at all of the homes on the market in the second quarter of 2008, we can see that the upward trend has leveled off. However, we still have more homes for sale in the Montgomery area right now than we did this time last year:

Montgomery area homes just aren’t selling fast enough spark a move back to a balanced market. One way to view this trend is to compare the total “active” (homes for sale) listings in the Montgomery MLS. For instance, in June 2008, there were 3,493 for sale, and 381sold.  That gives us an active to sold ratio of 9.2.  We saw in the above chart that inventory has leveled off, but sales are off as well.  That keeps this ratio high, still well in the buyer’s market territory.

Do you need help sorting through this info? What do all of these numbers mean to your specifically, and your own home search in the  Montgomery, Prattville, or Wetumpka areas?  How can you best use these trends to your advantage?  Contact us, or call the number at the top of the page, we would be glad to help you out.

How will home sales for 2008 match up to prior years?  I think it’s obvious that Montgomery is like most cities around the US in that the peak of the seller’s market was in 2005.  Since 2005, fewer and fewer homes sold each year.  Year to year comparisons show this pretty clearly:

Here is a look at the percent change in the first quarter when comparing the same month to the prior year.  For example, for the entire Montgomery area,  359 homes sold in January 2005 and 426 sold in January 2006, for an increase of 18.7% [(426-359)/359].  Contrast that with the fact that in March 2008, only 416 homes were sold as compared to 521 in March of 2007.  This yields a decrease of 20% [(416-521)/521].  Here’s a three year comparison:

A large part of the problem is the rising inventory of homes for sale in the Montgomery area:

Montgomery area homes just aren’t selling fast enough to soak up the inventory.  To put this into perspective, check out he ratio of homes sold to the inventory.  To get this, you take the total homes for sale in the Montgomery area in any particular month, and divide by the homes sold in that month.  For instance, in January 2008, there were 3,229 homes for sale, and 295 homes sold.  3,229 /295 is about 10.9.  If this number trends higher, it suggests a movement to a buyer’s market (i.e. lots of homes are for sale and not many are selling).  The opposite trend suggests movement to a seller’s. The first 3 months of 2008 show that ratio decreasing, so that is good news for Montgomery area home sellers, but we’re still a long way away from another seller’s market.  At times in 2005 this ratio was under 3.0.

Are you considering a move to the Montgomery, Prattville, or Wetumpka areas? Having trouble sorting through all of the info, to narrow it down to a city, then neighborhood, then the right house for you? Contact us, or call the number at the top of the page, we would be glad to be your local real estate agent.