November’s sales data is still being digested, but it appears there is a change afoot in our residential market. Of course the market changes every month, but we think there is a defining trend taking place that is now favoring buyers. Here’s the numbers (with the aid of the Cromford Report):
- Active Listings: 24,043 vs 18,122 last year at this time – up 32.7% – and up 3.1% from last month
- Under Contract listings: Down 37.8% – 8739 vs 14,060 last year – and down 1.1% from last month
- Monthly sales compared to last year: Down 23.8% – and down 15.9% from last month
- Monthly Average Sales Price per SqFt: Up 16.4% ($123 vs $106 last year) Down 0.9% from last month
- Monthly Median Sales Price: Up 18.3% ($183K vs $155K last year) Down 0.8% from last mont
According to the Cromford Report, Pending listings (homes under contract) have stabilized, suggesting that the demand for homes isn’t dropping any lower. Another complicating factor is that November had only 18 working days compared to December which has 21, so there were 3 less days of the month that folks were doing business. This could mean that we are just seeing unusually low numbers for monthly totals, which could be turned around in December. Michael Orr of ASU and founder of the Cromford report expects sales prices to stabilize in the area between $125 and $130 per square foot.
What does this all mean? Basically that although there are more homes on the market than there are people willing to buy them, it’s not necessarily an indicator of values continuing to drop, but just a balancing. Sowhy the drop in demand and the increase in supply? Well there are a few reasons. One is that home values overall have increased to the point where the investor crowd has all but backed out of the market. The second factor is seasonal. In a healthy market, buyers tend to cool their heels a little bit during the holiday season.
Also on the forefront, I am predicting a slight renewal of the short sale and foreclosure industry here in the Valley. Last month we talked about how the amount of distressed properties (short sales and foreclosures) on the market has been waning heavily. This was because the investor crowd was buying up foreclosures and short sales left and right. Why are short sales and foreclosures coming back? Well while the recent price increases have gotten many home owners out from under water, there are many homes (particularly ones purchased in 08) that are still very upside down!
Now with prices stabilizing this last November, many people will have to decide what steps to take next. For many, this will mean a short sale or foreclosure. That is why I believe we’re not completely out of the water yet, and it may yet be a while before our market goes back to “normal.” We have certainly come a long way from 2011 at the lowest point however, and we are on the mend. Or at least, so it would seem.
Finally, if you or someone you know is thinking about their next real estate move, we can help. With more than 35 years professional experience, Mike will advise you as to what’s best for you personally. Remember, there is no “one size fits all.” When you hear or read that now is a good time to buy or sell, that is a marketing generalization that may or may not apply to you. Mike will take the time to sit down and counsel you after learning about where you’re at. And of course, there is no cost or obligation! 602.689.3100