In order to know where you are going, you must take a look back to where you have been. The 2009 real estate market provided many challenges and surprises.
In Merced County the median sold price in December of 2008 was $115,000. In December of 2009 the median sold price was $110,500. This is a decrease of only 4%. An argument can be made that the market is starting to stabilize. Taking a longer look back- in December of 2007 the median sold price was $227,000. The December 2009 price of $110,500 is a decrease of 51% over a 2 year period.
The average of days that a property was on the market was 114 days in December 2008. In December 2009 the average days on the market was 31 days. This is a decrease of 73% in a 1 year period.
From December 2008 to December 2009 the number of properties for sale has decreased 56%. This is most likely attributed to State and Federal efforts to slow down the number of foreclosures. This has resulted in a decrease in the number of properties sold from 288 in December 2008 to 156 in December 2009 – a decrease of 46%. Also, the inventory (as noted in months) has decreased from 4.4 months in December 2008 to 2.9 months in December 2009 – a dramatic change from 25.6 months of inventory in December 2007.
I believe that the strongest indicator that the market has stabilized is that the median sold price has only decreased 4% in the last 12 months. Further evidence of market stabilization is that the median for sale price has gone from $124,750 in December 2008 to $124,900 in December 2009 – a slight increase of less than 1%.
In 2010, the market will continue to stabilize; interest rates may rise, but still remain affordable; and prices, we believe, have hit bottom and we feel may slightly increase.
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Gonella Realty's Market Update 