There have been a lot of numbers bandied about recently about the price run up on real estate here in Sullivan County — and the possible relationship between the steepness of the appreciation curve to the potential depth of a downturn. I’ve been collecting data now for over 5 years and decided to post the quarterly median sales price (for single family sales reported through the Sullivan County MLS) from the 1st quarter of 2002. If you’re a regular reader of my "Current Market Conditions" monthly report, you know that I’m a staunch believer in looking at the median sales price (the price at which half of the properties sold for more, half for less) because it tends to be a more stable indicator of trends, and isn’t as affected by a few large sales in a short period of time. The average is more volatile than the median, but over time has tracked at an ‘average’ of 21.5% above the median.
The 4th quarter 2007 data is preliminary, as we haven’t closed out Dec. yet. But given that there’s only 1 business day left in the year, I doubt we’ll see much change in the $165,000 median sales number for the 4th quarter after the last sales are reported. If the number holds, the median sales price for the 4th quarter will come in 13.7% below the 4th quarter a year earlier, and down 17% below the peak of $198,000 in the 2nd quarter of 2007.
The 4th quarter 2007 downturn, though, needs to be qualified somewhat. The drop in prices can likely be partially attributed to buyers downshifting to lower priced properties, and not just an across the board 17% fall in property prices. I’m sure there’s some type of statistical analysis that could eek out that answer, but we’re burdened here by small sample sizes that make micro-analysis difficult to interpret. (A dream job for me would be to work for one of the real estate consulting firms or big brokerages in the city, and be able to data mine with thousands of data points.)
Note that this data only covers single family residential sales. There has been a lot of discussion on this blog about raw land prices, but I just haven’t collected that data over time. Also, you may also notice that in the past few years there have been a few down quarters. But of the 4 single down quarters prior to mid-2007, 3 were the 1st quarter of the year, which traditionally has had lower closing prices due to more primary and less second home closing activity during mid-winter.a final point to consider is that the housing stock hasn’t remained static since 2001. Particularly in the second home segment, its improved considerably. Dozens, if not hundreds, of old houses were renovated, updated and resold. There was considerable new construction, like the Catskills Farms farmhouses that weren’t part of the inventory in 2001. Pundits and nay-sayers may counter, "Better inventory? You’ve got to be kidding." But as someone who was selling real estate here in 2001, I can assure you the inventory is MUCH better today.