One of the things we’re running into in the market is that there are a good percentage of market segments that have had almost no sales since September because of the financing meltdown and its fallout. As a result, some of the sellers are now so distressed that we’re starting to see listings priced below the most recent closed sales. And I’m not talking about underpriced by $5, either.
I just saw an appraisal from south county where the most recent relevant comp sold in July 2007, and the most recent listing added to the MLS is 15% lower than that. They’re condos, and both are of the same model, so in appraiser speak that is the ever-elusive matched pair that we’re always looking for when we’re trying to definitively demonstrate a value trend.
Incidentally, that new listing is on top of 2 other listings, one posted in August 2007 and the other in November. The November listing just repriced a week or so before the new listing, and the new listing came online $20k below that. These two listings are both literally chasing the market down.
I’ve been saying this bust looks like the last bust, but that’s no longer the case. We’re breaking new ground here. I’ve never seen it move like this before.
I think what’s happening is that the sellers and the buyers are all waiting for the other to blink, only the buyers have a lot more leeway than some of these sellers do. Once a couple of these sellers do give up I think the resulting movement in pricing is going to nothing short of dazzling.
Right now it’s looking like this year could be the reverse of 2004.
