Tuesday, August 11, 2009

Absorption, Inventory Levels, and Athens Housing

Yesterday I had a chance to be interviewed by the local Athens paper regarding inventory levels in our "Classic City" and how they compared to the national picture. It was actually like exploratory surgery as I had a chance to take a look in the mirror of our town's real estate market to see where we are today.

What we came up with was that there are 1239 homes for sale in Athens, GA as of today. This would include not just single family detached, but also condos and townhomes. In the past year, through 8/10/09, there were roughly 800 homes sold in Athens. You could derive from this that we have about 18 months worth of housing inventory from these facts. I think that is most telling however is that for a healthy "balanced" market, inventory levels need to be between 4-6 months. With this said, we need to absorb through sales, withdrawals, or expirations of listings about half to two-thirds of existing housing inventory for sale to have a healthy market again.

How long will this take? There are too many variables to be able to know that figure precisely.

Fun facts for our housing market, for example, in the past year there were 2400 new listings put on the market. Roughly a third of these have sold as I pointed out. Another 1240 are still on the market. This leaves about 10 percent that either expired or were withdrawn without selling.

New construction adding to the mix of additional listing inventory has all but been eliminated for now. This is one reason why for the year ending June 2008 there were more than 3300 new listings on the market and now we are off that figure about 1000 homes.

In all, we see foreclosure rates locally, including Oconee County, to be much less than the national averages. The market may have too much inventory, but we are weathering the storm.

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