The question we were left with last month was whether the market's abysmal performance in September was a temporary stumble or a full-blown collapse. After twelve months with the number of buyers of single-family homes over $400,000 ranging from 10 to 20, September saw only 6 sales. October saw 14 buyers so it appears that September was an
aberration, rather than the start of a
new leg down. Of course, making predictions about the future and trying to guess whether current trends will continue is always fraught with danger, but at this point, if we had to pick, we'd guess September was abnormally low and the market will return to its past activity levels in the 10 to 20 range.
Unfortunately, the three month moving average did fall to 12.0 from the range it had been in for the past eleven months (13.0 to 16.7). This is the lowest it has been since March of 2003.
Inventories (Graph on following page)
The number of single-family homes on the market continues to decline, mainly because owners have decided now is not the time to try to sell. From their peak levels we have seen declines of about 43% in the $400-
500,000 price band, 30% in the $500-
700,000 price band and 21% in the $700,000 to $1 million band. The $1 million plus band is only down 3.9% and if the present trend continues, there will soon be more homes in that price band than in any other.