Could it be true? Could the Sparks market be nearing the bottom and stabilizing? I say, YES, and I’d like to present what I feel are compelling reasons why the housing market in Sparks seems to be at the bottom.
I like to follow the numbers, because to me, the numbers don’t lie. Pundits can spin information right and left so fast I get dizzy, so I decided to go to the source – the Multiple Listing Service. Remember when you took Trigonometry in High School? (I know, it was a long time ago for me, too.) Remember when you did your graphs? Well, I decided to put together a graphical representation of the list and sales prices of homes in Sparks over the last 4 years. What I theorized I would find would be a steep decline as the market went down, with it leveling out toward the bottom. We’re looking for a U shape here, with the right hand side of the U being the return of the market values. Now I don’t expect it to look exactly like a U, and I suspect that the right hand side of it will be pretty wide – it’s going to look more like a check mark, but the important thing is where the bottom is.
Here’s what the chart looks like with Sparks Home sales from April 2005 through March 2009:
So there’s a couple things I see from the data. First of all, you can see when the peak in the market was because I went back far enough. It was January 2006. And while the fall seemed steep to everyone who bought in 2005, it really took three years to get where it is today. The Sparks market declined from an all time high average sales price of $346, 567 in January 2006 to $194,119 in March 2009.
Now, there’s a few things that are very important to keep in mind when reviewing a graph like this. It is not a true picture! It’s likely that these numbers are skewed because only those sellers who NEED to sell have been selling over the past couple of years. The number of foreclosures and short sales also push down the average selling price, and since the market is thus skewed, the data is skewed.
The most important thing to see is the very end on the right hand side. Do you see it? It’s FLAT! For the last two months, the average selling price held steady. For February 2009 it was $194,070 and for March 2009 it was $194,119. I believe this indicator is predicting the bottom of the market. Whie the rest of the U wasn’t as steep as I pictured it in my mind, my instinct was right saying the market is levelling out.
The other fascinating thing I looked at was sales volume. In April, May and June 2005, 200 homes a month were selling in Sparks. It tapered downward until it hit a low point in February 2008 when only 50 homes sold. That was the lowest point during the entire 4 year period.Â In March 2009, 122 homes sold. Logic would follow that first the number of home sales every month would increase before prices would gain traction and make any sort of gain…With the exception of November 2008 and January 2009, Sparks has seen over 100 homes sell each month. This is another reason why I believe we are seeing the first signs of a blossoming recovery in the Sparks market.
Data provided courtesy of the Northern Nevada Multiple Listing Service and covered Area 108 which is all of Sparks.