DAMN! 5 full years of data to play with!!! I always say New Year's is my favorite holiday...
I'm going to post condo numbers today and single-family home numbers tomorrow. I have some other changes coming up on the blog too. But as I said yesterday, I'm not going to make any promises I can't keep. So I'll save those announcements for when I can actually deliver them.
On to the numbers...
We knew transactions were going to be down in 2009 from 2008. In fact, at halftime, we were predicting transactions in the condo market to be down as much as 43%. But then a little thing called the Obama Tax Credit (that's not the technical name) came along. And Q4 of 2009 turned the transactions on a dime. In fact, December of 2009 boasted almost TRIPLE the number of transactions (in our "watch" neighborhoods) as December of 2008.
(P.S. I knew that credit would do something funny to the market, but that triple-December shit threw me for a loop.)
(P.P.S. Is it "threw" or "through"? I think it's "threw", but I'm not sure. I'm trying to stay focused on the numbers.)
Prices in the neighborhoods did what they were supposed to - they followed suit. If demand falls out of the market, prices naturally have to adjust (or people will simply stop buying homes). And since people didn't stop buying homes, prices made their adjustments.
There is some correlation here. The neighborhoods with big drops in sold listings also saw some of the biggest reductions in prices. In short - the South Loop got its ass kicked.
So what's up in 2010? With an overall reduction in transactions of 24%, that should translate to even lower prices in 2010. But it will take some numbers from all of Q1 to really see what's going to happen. And here's the wrench in the prediction engine - that credit was extended through 04/30/2010. So expect some craziness.
We'll keep our eye on it though.
