Sales in Las Vegas are down 20 percent. Phoenix has fallen by 31 percent and Sacramento, 35 percent. Many other areas in the country are experiencing a drop in sales by 10 percent of more.
Is this the real estate bust many were predicting? If so, have we seen the worst of it?
Since I live in Nashville I’ll use it as an example. Or is it more of an aberration?
Nashville’s real estate sales are down by 3.5 percent. I don’t think that constitutes a major fallout. Its market seems to be stabilizing at a steady manageable rate. One thing that is surprising to us is that prices don’t seem to be falling. Many Nashville homeowners are sitting on their properties and are willing to wait until they can get full market price. That takes tenacity.
But here’s the confusion. Inventories are up in Nashville as prices remain steady. The median price in the Nashville metropolitan area in August was $184,000. That’s a 12 percent increase over a year ago. Condo prices are up by 5 percent at $140,000 per unit. Meanwhile inventories are up 20 percent since summer. If we were expecting prices to fall as inventories rose, that hasn’t happened.
Still some experts are trying to help us brace for the real estate storm surge to come. They keep comparing real estate to the stock market.
Fact is real estate in not like the stock market. Real estate is mostly a localized investment. Nashville’s bestreal estate is determined by location and varies from neighborhood to neighborhood. That’s nothing new, but many experts still try to tell us real estate markets are similar to stocks which are more like national or even international beasts.
Of course, more deals will be coming in the next few months even if the economy doesn’t worsen. Even if homeowners do not have to bail out because of job loss or a recession, others will find themselves in trouble because of ARM’s. Good deals will be available in all markets for savy investors who watch, learn and adapt.