The Midyear 2008 Residential Real Estate Market Analysis

Disclaimer:  This analysis applies only to “single family residences” sold within the city limits of Fredericksburg, Texas from the period of Jan. 1, 2007 through June 30, 2007 vs. Jan. 1, 2008 through June 30, 2008 utilizing figures reported through the Gillespie County Board of Realtors multiple listing service.

If you had maintained any hope that the national trends concerning the strengths/weaknesses of the real estate industry have somehow bypassed the Fredericksburg, Texas real estate market, you may be interested in the following:

Overall (per the disclaimer above), the total number of listings available through June of 2008 has increased by 82%, the average time on market for any particular property has increased by approximately 9%, total sales volume ($$) has increased by 1.7%, the average sold price has also increased by 1.7% and the median sold price has increased by 10.2%.

A similar phenomenon (more on the market, longer to sell, but higher average prices) has recently been reported by Austin area realtors.  The simple explanation to these seemingly incongruent statistics lies in the nebulous, but all-important, “market timing”.

Simply put, while the problems affecting much of the country have not yet slammed Fredericksburg TX real estate, we are beginning to feel the effects of damage created by the sub-prime banking fiasco and the impact this has had on broader credit markets.

The above statistics can be used both to report what has happened (ytd vs. same period last year) but they can also be used to forecast likely trends for the remainder of the year.  The fact that we have (on average) 82% more in inventory is simply staggering. Couple that with lingering credit issues, projections of increases to mortgage rates, stagnant wage growth, the increasing cost of consumer staples, the weak dollar, record oil prices and a presidential election and all signs seem to point to a market that will continue to “soften” via increasing times-on-market and a significantly declining list price to sales price ratio.

Great news for buyers, not so much for sellers. This is a rather classic and routine cycle we are in the midst of and one that (hopefully) will pass in rather short order. A review of past economic “downturns” and real estate cycles show them to be happening with more frequency but with less severity and for shorter periods.

Some free advice:  if you don’t have to sell right now…don’t.  If you’re in the market to buy, “now” is as opportune a time as you’re likely to find in Fredericksburg, TX.  Remember, Experience Matters!