According to the National Association of Realtors economic forecast, existing home sales are forecasted to finish at 4.55 million up from 4.26 million in 2011 and new home sales at 370,000. Housing starts are projected to rise from 611,000 in 2011 to 710,000 this year. The existing home price is going up as well from $166,100 to $168,000 in 2012. Interest rates should come down to 4.1% in 2012 from 4.7% in 2011. As you can see, the trends in the real estate economy are forecasted to improve slightly in 2012, which is good news. I am encouraged by the current trends in real estate for they are going in the right direction.
In Douglas County real estate activity is seeing mixed results when we compare February 2011 to February 2012. New listings and the average sale’s prices are down but pending and closed sales are trending up. Our closed sales rose from 52 to 60 (+15.4) and pending sales rose from 75 to 87 (+16.5). New listings went down from 181 to 124 (-31.5%) which is good news for the sellers. In fact we have 14 months of inventory on the market for sale which is down (-24.3%) from last year and (-22%) from 2010. Comparing the previous month of January 2012 to February 2012 closed sales fell slightly from 69 to 60(-13%), pending sales rose from 84 to 87 (+3.6%), and new listings decreased 141 to 124 (-12.1%). The average sales price year to date fell from $166,100 to $140,100 (-15.7%). In other words, sellers are getting more realistic in their pricing of their homes with some sellers bringing money to the closing table in order to close their transactions.
Our average sales price, in February 2012, is the lowest it has been since 2000-2001. Even though we have seen an increase in closed sales, the prices are lower. Our lower prices also reflect the competing bank owned properties that have entered the market. They often take less to get the property off their books. Many sellers are realizing less in their asking price because many buyers are asking them to contribute toward paying for their closing costs and pre-paids. I am often asked, “Has our market bottomed out?” I don’t think so. In fact, we still have over a year of inventory and our local economy continues to suffer. These factors plus others have put a drag on the local real estate market. If people are out of work for a long period of time or they cannot find a job, they cannot afford to buy a home.
Commercial, industrial and office buildings continue to suffer with over 500,000 SF of property for sale or lease in Douglas County. We are not seeing any new industry locating here or existing industry expanding which is a trend that will continue for awhile. Across the nation, the only bright spot in new construction has been in the apartment arena. Many people are delaying the home purchase process or deciding to rent instead of owning. The vacancy rate in Douglas County is under 10% with the demand continuing to rise. We have seen some new projects within our area, with the complete remodeling of Wal Mart, the new construction of the Lang Center at UCC, the new Saving Grace facility, the Winchester I-5 interchange and other smaller projects. There are a number of new building projects on the drawing board in 2012 which will lead to more jobs.
Please keep our troops and their families in your thoughts and prayers and thank them for their sacrifices in preserving our freedoms. Have a very Happy Easter and treat yourself and your family to a good time by telling them each day how much they mean to you!