Greater Lake County Real Estate Market Update

Updated March 2009

If you remember the last update I sent out (August 2008), I claimed we hit the bottom of our
local real estate market and our market was on the road to recovery. Very shortly after I sent that
market update out…the stock market came tumbling down and crashed sending everybody in the
country into hiding. Consumer confidence and consumer spending came to a screeching halt.
The numbers you see below are a refection of how the market has recovered since then and how
consumer confidence is coming back and so is our local real estate market. Remember our real
estate market is like a championship boxer…we can take a pounding but we will always get back
up!!!

Number of Transactions Per Month

8
04

05

06

07

08

09
04

05

06

07

08
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8
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There were 252 transactions that occurred in March 2009. This is a 10.5% increase in
transactions as compared to my last market update in August 2008 (228), and a 44.8% increase
in transactions compared to January 2009 (174). I remain cautiously optimistic that the number
of transactions will continue to increase over the next several months.

Average Days on Market

8
04

05

06

07

08

09
04

05

06

07

08
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The Average Days on Market for the most part has remained steady with no real movement up or
down. As of March 2009, the average DOM (days on market) is 133 days. This number is
slightly higher than August and January’s average of 130. The important thing to remember is
pricing and condition. In our current real estate market, we are in a pricing war and a beauty
contest. Those sellers that are insisting on the highest price for their homes need to be prepared
to wait it out. There is still a mountain of inventory creating competition. A healthy market
usually averages about 90 days +/-.
 % of Sales to List Price
100
98
96
94
92
90
4

8
04

05

06

07

08

09
04

05

06

07

08
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The % of Sales Price to List Price is another indicator that has remained somewhat flat over the
last year at around 92%. This means sellers who sold their properties during this time period,
sold those properties on average, for 8% less than what they were originally asking for the
property. I don’t see any real movement in this indicator over the next six months to a year.

Inventory of Listings
6500
5500
4500
3500
2500
1500
500
4

8
04

05

06

07

08

09
04

05

06

07

08
4

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This is the really good news…our current inventory of properties being offered for sale is 5,099
properties. Folks, this is an 8.37% decline in inventory since this time last year (Mar 08 was
5,565)!!! This is actually the lowest level our inventory has been since March 2007 (5,028).
This number needs to continue to drop in order to get home values to level off and start to
appreciate again.

Absorption Rate (Months of Inventory)

36.00

31.00

26.00

21.00

16.00

11.00

6.00

1.00

Months of Inventory is a new indicator since my last update. I wanted to put inventory levels
into perspective and at the same time being able to visualize 5,099 properties. In our local real
estate market we have 20 months of inventory. What this means is, if there were no more new
listings added to our inventory and we continued to sell properties at 252 homes per month…it
would take roughly 20 months to burn through the existing inventory. Now the good news, at
the end of March 2008 we had 21.5 months of inventory and by the end of 2008 the count grew
to 30.7 months of inventory. Due largely to the stock market crashing and everybody pretty
much shut down during the fourth quarter of 2008. I’m very proud to say that since then we
have reduced our months of inventory by over 34%. Keep in mind that a healthy market consists
of approximately 8 – 12 months of inventory so we have a ways to go, but we are heading in the
right direction.

Averge Sales Price

300000
280000
260000
240000
220000
200000
180000
160000
140000
120000
100000

Average Sales Price is where we are going to continue and struggle to maintain until inventory
gets to a normal level. The good news is that we have rebounded since January 2009 to an
increased average sales price of $155,000…a 10.6% increase!!! We will get there…

I hope you find the information I have included informative. If you have any questions or need
further explanation, please don’t hesitate to contact me at (352) 504-0055.

Thomas D. “Gus” Grizzard, CCIM