Greetings Valued Friend,

As we begin to look back on 2008 we will never forget that this has been a year of change, challenge and trying circumstances.  Everywhere we turn we hear, see or read about the falling housing market, the unstable stock market, and our overall economic health.  To assist you in your Spokane real estate endeavors enclosed please find the market report and insight for November;

Market Activity

November Activity as reported by the Spokane Association of Realtors reported closed sales of 252 units during the month which is down 187 units from the closed sales as reported in October's Activity.  This represents a 42.5% decrease in units sold as compared to October 2008.  In comparison to November 2007 closed sales of 483 units we were down 231 units which is a 47.8% decrease this year vs. last year.   For November 2008 pending sales reported were 225 units, which is down 138 units as compared to October pending sales of 363 units, this equates to a 38% decrease.  In comparison to November 2007 pending sales of 405 units we are down 180 units, a 44.4% decrease.

On a year to date basis closed sales through November 2008 were 4,619 units, which is a decrease of 1,870 units as compared to year to date sales through November 2007 of 6,489 units.  This 1,870 unit difference represents a 28.8% decrease in closed sales year over year.   Pending sales year to date through November 2008 of 4,681 units is down 1,628 units compared to pending sales year to date through November 2007 of 6,309 units.   This represents a 25.8% decrease in pending units' year over year.  

The importance of looking at pending units vs. sold units is that pending units are a more recent indicator of market absorption and activity.  When a property goes pending this signals that the property has gone under contract and the contingencies of the purchase and sale agreement have been satisfied.  All parties are now moving towards the agreed upon close date.  A sold units indicates that the property successfully changed owners.   Due to deals having elongated closing dates related to contingent home sales, financing, 1031 exchanges, etc. this metric doesn't provide us the most current market activity and direction.

During the month of November the average sales price in Spokane County was $200,086 and the median sales price was $179,950.  This is in comparison to October's average and median prices of $201,797 and $177,000 respectively.  On a YTD basis through November our average price of $206,607 is down $4,702 dollars per unit or 2.2% compared to November's 2007 YTD average price of $211,309.  From a median price perspective the November 2008 YTD price of $184,370 is down $630 from our November 2007 YTD price of $185,000, resulting in a .34% decrease.  So despite the slow down in sales prices and value here in Spokane continue to hold steady.

As we have been discussing in the last few newsletters as we approach the end of the year and the holidays we historically experience a downward turn of inventory on the market.   November is falling right in line with expectations as Spokane Inventory  for the month stood at 2,925 units which is down 248 units as compared to October 2008.  This represents a 7.82% decrease in inventory from October to November.  In comparison to November 2007 inventory is up 61 units over this time last year which equates to a 2.1% increase. 

While overall inventory continues it's downward trend and with only 225 pending sales during the month of November our  Spokane market absorption rate  moved downward to 7.69% from October's rate of 11.44%.  This is the first time all year that our absorption rate has been below double digits.  When looking at months of inventory on the market November stood at 13 months.  This is an increase of 48.7% compared to November's months of inventory available of 8.74 months.   Thus at the current absorption rate of 7.69% and assuming no new listings come on the market, it would take us 13 months to sell the current inventory of 2,925 units.  The combination of less then anticipated sales, the current uncertainty in the economic climate, along with our seasonal market cycle have all contributed to a less then stellar November.    

As a reminder when months of inventory are above the 6 month supply the market is considered a buyer's market.  Buyers have many properties to choose from and thus have an advantage when negotiating with sellers.  When inventory levels are between 3 to 6 months the market is considered neutral, where neither the buyer nor the seller has an advantage.  Under 3 months is considered a sellers market, where sellers have an edge over buyers.  Based on the recent trends we continue to be in a "Buyers" market and sellers need to understand this when deciding to list their properties for sale.

We continue to see sales, pending sales and activity in specific price ranges and areas of Spokane.  With absorption rates below double digits and month of inventory in double digits it is imperative that you understand the market conditions so that you can be successful in your real estate endeavors.   Enclosed is the Spokane November Price Breakdown and Market Analysis which will provide further analysis and activity for various price ranges and area's of Spokane.

Commentary

I understand there is concern and fear in regards to the real estate market.  However, living and breathing it each and every day I can confidently say we will survive this downward cycle.  With current interest rates below the 5.5% mark on 30 year fixed rates, a market with plenty of inventory providing choice and selection, and motivated sellers, make this an excellent opportunity to "move up" or start your real estate portfolio with that investment property. 

Real estate is a corner stone of our country and as you can see from the attention it is receiving at the highest levels of government we will see a turnaround, the question becomes are you going to be prepared to benefit?

Here at the Spokane Real Estate Advisor our primary goal is to educate, serve and provide value to you my clients.  If you would like a more in depth discussion of the market and how you can benefit in the current market conditions please contact me.  I look forward to earning your trust, respect and business!

Regards,

John Creighton
Spokane Real Estate Advisor

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