dothanhomesearch.com

By: Charles Woodall


http://www.dothanhomesearch.com

2008 was a challenging year for the real estate industry, and those of us practicing the profession here in the Dothan area would certainly agree. Home sales were down over 10%, the number of homes for sale is up to record levels, and the credit crunch plus the elimination of down payment assistance has made it somewhat harder to borrow money to buy a house.

Looking back at my predictions for 2008, I was pretty close on most. I do think there is a little more uncertainty going into 2009, simply because there are so many sectors of the national economy that are hurting right now. The housing market usually leads economy recovery, and there are several reasons why I think that recovery will start to gain traction sometime in 2009.

Do these predictions have any higher meaning? No, not really. Again, they are nothing more than my opinion based on a decade of experience in the market and a lifetime of living in the Dothan area. I simply like to look forward and think about what might happen. Nothing more, nothing less.

Home sales down in 2009

When the final numbers are in for 2008, expect to see a drop of 10-12% from 2007. I fully expect to see another drop in 2009, although maybe not as much. All signs point to continued sluggish sales in the near term, and much uncertainty in the long term. We’ll go with an 8%-10% drop, and hope that I am wrong.

Homes on the market steady

I missed this one somewhat last year, as I didn’t see us hitting the 1,000 mark in homes for sale in Dothan. The total inventory has hovered around this level since October, and there is really nothing that makes me think it is going to change anytime soon. I think there will at least 950 or more homes on the market come next December. Any number below that will likely mean the market has turned around quicker than anticipated.

Mortgage rates steady

Our government is currently doing everything it can to hold down all interest rates, including mortgage rates. Finding a 30-year mortgage at 5% is pretty easy right now, and I think it will be easy for the foreseeable future. Barring a miraculous turnaround in the economy, look for rates to stay in the 5-6% range all year.

Foreclosures up

There is a lot of talk around that there is another wave of foreclosures about to hit. Foreclosures are up in our area and will likely continue to rise. The severity of the hit the Dothan real estate market takes related to foreclosures will again depend on what happens with the economy. Foreclosures happen when folks can’t make their house payment, so bad economy times will only exacerbate the problem.

New Construction steady

The new construction market in Dothan didn’t fall off as bad as I thought in 2008. New home starts were up slightly, although sales were about the same. There is still a lot on the market, but builders are building. That being said, I think there is a greater chance of a decrease in new construction in Dothan than an increase.

Median Price down

Looks like we’ll end 2008 about where we were at the end of 2007, with a median price in the low $130K range. I expect we will see a slight lowering of the median home price in 2009, if for no other reason than because the real estate market is so soft. A median price in the upper $120K range in 2009 would not surprise me, which would be a fall of roughly 3-4%. It is important to keep in mind that the median price of a home in Dothan was about $100,000 back around 2000.

So, now that you’ve read mine, what do you see happening in the Dothan real estate market in 2009? Chime in by commenting below. What challenges do you see as a buyer or seller? Are you planning on buying or selling in 2009?

Discuss.

Related posts:

1. Monday Market Snapshot - June 29, 2009
2. Monday Market Snapshot - June 22, 2009
3. Are we about to have another housing market boom?