Thursday, July 10, 2008

JUNE METROLIST STATISTICS


THE MARKET
Active Homes on the Market as of 6/30/08: 26,104
Active Homes on the Market as of 6/30/07: 29,685
Change: - 13.72%

Homes Under Contract as of 6/30/08: 6,308
Homes Under Contract as of 6/30/07: 6,137
Change: + 2.80%

Homes SOLD in June 2008: 4,845
Homes SOLD in June 2007: 5,087
Change: – 5.54%

WHAT IT MEANS
Interesting trends continue.

On the street, here's what I see. There are basically four levels to our current market:

1) Foreclosures and short sales;
2) Privately owned entry level and starter homes;
3) Traditional “middle class” neighborhoods;
4) High end homes and estate properties

Average “market time” for each of these types of homes is radically different. With 80% of foreclosures listed at $240,000 and below, there has been an abundance of homes on the market at the lower price points. For private owners, competing with banks (which discount heavily on their inventory) is difficult, but not impossible. Purchase activity on foreclosures has soared since March, with multiple offers and above list price offers becoming normal as investors and first-time buyers compete for discounted properties.

The middle of our market is doing better than most people realize. In fact, average market time for homes in the $300k-$399k price range has fallen to 4.55 months (down from 6 months in January), which technically can be defined as a sellers’ market.

At the higher price points, inventory is tougher to move, mostly because of tighter credit and underwriting guidelines. However, prices are stable… it just takes patience, pricing and a whole lot of promotion to achieve your desired result. As more homes sell in the middle of our market, demand at the higher price points should also increase.

Last month, I posted a chart in my monthly summary showing what's happening with the inventory of homes. June was our fifth consecutive month of reduced inventory and rising list prices... that constitutes a trend, my friends.

For single family homes, the year over year inventory trend looks like this:

FEB: 4.21% MORE homes on the market than one year earlier
MAR: 0.02% FEWER homes on the market
APR: 2.07% FEWER homes on the market
MAY: 5.66% FEWER homes on the market
JUN: 10.70% FEWER homes on the market

For condos, the trend is even more pronounced:

FEB: 8.73% FEWER condos on the market than one year earlier
MAR: 13.16% FEWER condos on the market
APR: 17.13% FEWER condos on the market
MAY: 20.50% FEWER condos on the market
JUN: 22.51% FEWER condos on the market

This huge drop in inventory, especially among condos, is happening at the lower price points in our market. Basically, it’s less foreclosure inventory.

Days on market for SOLD homes has fallen from 111 for single family homes in February to 94 today, and from 123 for condos in February to 108 today.

Right now, your approach to this market is going to depend on which market you are in. Foreclosure buyers are living in a very different reality from high-end sellers. Banks are raising list prices while traditional mid-range sellers still must cut price to compete. But things are starting to balance out.

To continue this positive trend, we need stability in the credit markets and enough consumer confidence so that buyers don't lose their resolve. We've got good fundamentals working right now... the goal is to keep moving foward.