And the impact hasn't been good. Needless to say the real estate market was in the doldrums before the you know what hit the fan in October. Now the question that is being asked is "What effect is the crisis having?"
It's too early to measure the impact on prices, but there seems to have been a measurable impact on new contracts. For the year, closed sales of single family homes in Monmouth County have been running about 22% below the levels of last year and the October closings seem in line with that figure.
The new contracts are another thing. The single family homes reported under contract around the county this October is about 32% below the number reported in October 2007. There will be some contracts that will be reported in early November that will be counted for October, so that figure will come down some, but most likley it will change the number by only a couple of percentage points.
Why are new contracts important? New contracts are the best indicators of current activity in the real estate market. The closed sales reflect the sales activity that occured 45-90 days ago. So as we go forward, the new contracts for October will be reflected in the closing numbers for November, December and January.
What does all this mean? The Buyers' Market we find ourselves coping with is likely to continue well into next year, at least. It is hard to come up with a scenario, regardless of who wins the election, that the excess inventory will dry up and prices will firm up within the next 6 months.
If you are a seller, it's a race against time. You aren't going to like today's prices but you will probably like them a lot better than next year's prices. If you are a buyer, more and more good buys are popping up on the market. Yes, everyone wants to buy at the bottom, but only hindsight will tell you where that was. For anyone with a 5-10 year time horizon, now is a great time to buy.