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In what I am presuming to be the final numbers for December, the news is mixed. There were 1466 new listings in Gwinnett County, a 10% increase over December, 2006. Sales were fairly weak, with 571 properties closing… a 38% decrease from the previous year. But, on the positive side, the new/sold ratio ratcheted up to almost 40% (39% actually). This is the best ratio since last summer.

I’m going to call this as neither positive nor negative… average prices ended up 2.3% ($242,099). There are two reasons I am not giving this a positive. First, I want to see prices drop in order to spur sales. Second, I don’t think this increase will stick in January. I think that the numbers may be skewed by some higher end sales. That average is $15,000 higher than the trend.

Let’s look at the absorption rates. Across the board, the three month, six month and twelve month averages trended down from the previous month. But, as a snapshot, the rate is showing the market still slowing… it just is decelerating.

The rates are as follows (with November in parenthesis): Twelve month, 10.2 (11.0); Six month, 11.5 (11.5); and Three month, 13.8 (14.9).

Of course, we really want to see the rates around 6 months of inventory, as that is seen as a balanced market. When we see the shorter periods as higher than the longer period, that means the market is slowing. However, the shorter the period, the more volatile the rate tend to be.

As part of a listing presentation for a seller, or market analysis for a buyer client, I run these numbers focused all of the way down to the neighborhood level whenever possible. The smaller samples mean that the numbers may be more volatile as well.

Let’s look at January… (but, it is going to change)

The numbers are so far from what we have seen that I almost hate to even use them. But, here we go… Days on Market came down a little compared to the previous month. And, the number of new listings came down slightly (6%) from the previous year. The number of sales closed tanked (down 67% from a year earlier), but is less than half of December’s Pending Sales. That tells me that there will be a considerable increase in the Closed Sales for January in the next month. Price is down 6.2% from the previous year. This might stick… but I think it will bounce around some.

The ugliest number, and one that I expect to change a lot before these numbers go final, is the new/sold listings ratio. It stands at 10%... If this were to hold, sellers would be looking at a 1 in 10 chance of selling their home. One could also say that only one house in ten was priced to sell… or there were ten sellers for every buyer. But, I expect that number to change to around 25%... still not great.

We are still seeing the Sub-Prime Mortgage Meltdown/Liquidity Crunch/Pre-Recessionary Fear effect. Interest rates are pretty good… and got better at the end of the month. Employment in Gwinnett County is very strong. Actually, employment in Atlanta in general is quite strong. The affordability index is not looking bad.

The downward pressures are:

• Fear – People are worried that prices will plunge.

• Mortgage availability – Some buyers that were previously borderline are not able to qualify currently.

• Cash – Zero down mortgages exist, but are not as prevalent as they had been even a few months ago.

• Education – Many would be buyers are not aware that there ARE still mortgage products and rates that will work for them.

The next couple of months in the Gwinnett County/Atlanta, GA area are very important. We are moving into the traditional busy part of the year. If strength starts to show, the market may turn hard and fast. If the buyers stay on the sidelines, we might have to wait until 2009 to see a turn. I have been saying that I think the market would turn late in the first quarter… and I still think it may.

As always, we won’t see the market turn until it has passed. We can only look at these numbers in the rear-view mirror. So, as with the Fed calling a recession, we will be well into a turn before we can prove it. And, the best deals will go to those that moved first. Finally, buyers will determine when the market turns (sellers will too…). When the buyers move off of the sidelines en masse, the market will turn. When sellers price to make the buyers move… the market will turn. If everyone waits for someone else to blink, all that happens is stagnation.

Look for the next report in about a month…