Monday, September 09 2013
There are a lot of positive things to discuss about real estate in this month’s Market Watch, both locally and nationally. Although from both perspectives the news is good, the news is not necessarily the same.
According to Lawrence Yun, chief economist for The National Association of Realtors, sales prices nationally are 13.7% above last year’s levels. Prices are still 7.3% below their all time high (July 2006). Days on market data is more difficult to obtain accurately but best estimates are in the 60-70 day range. There is currently a 5.1 month supply of homes on the market. Several factors influence these statistics. Cash buyers represent 31% of the market. This segment is largely represented by investors, who obviously view real estate as an attractive long term investment. Distressed properties represented 15% of all sales in July. That percentage is down about 40% from its high but is still almost double the historical average. This suggests that shadow inventory is disappearing, which is good, but it will still take a couple of years to get back to historically normal levels. Finally, first time buyers currently represent about 29% of the market, substantially below the normal 40-45% of the market.
Locally, our market is very similar to the rest of the nation in terms of month’s supply of inventory. We currently have a little under 5.3 months supply and have been under six months supply since April. Our days on market is higher than most of the country and is still just over 100 days. The most interesting comparison however is sales price and how it has changed. While year-to-date sales prices are only up 4.7% from last year’s average our market is now at the highest level of both average and median prices we have ever seen. The median price in our market declined for 4 consecutive years and our low point was in 2009. Since that time our median price has increased every year with this year representing the highest average and median prices we have ever experienced in this market. While it may not feel that way our market simply did not decline as much as the nation as a whole and our market has, at least in terms of price, completely recovered from the recession.
One interesting thought I had after looking at this data was that it all made sense to me except I would have thought our days on market would be lower than it is, given all of the other market conditions. I asked another Realtor in our office what she thought and she said
“It’s simple. Houses priced right in excellent condition sell quickly. Houses that need work or are a little over priced just sit on the market”. She is right. If you want to know the right price for your home or if you need some tips on getting your house ready to sell give me a call today. If you want to see some homes visit FCTuckerEmge.com or give me a call. You can reach me on my cell phone at 812-499-9234.