Out on a Limb

We did see the downward pressure on pricing come about in May that we had expected, especially in the single family sector but the overall market rebounded nicely in June.  As the spring market ends and the summer market begins this is normal, as those sellers that have to sell but have not sold start to get more aggressive in their pricing.  They do not want to miss the summer market as they missed the spring market.  It hits the single family market a little harder because they have more inventory that is taking longer to sell and because their typical buyer is more impacted by schools.  Typical cycle is that we see appreciation in the spring and then we give some back in the last couple of quarters.  As long as we do not lose more than we gained we have appreciation for the year overall.  For buyers the trade off is that there is more to choose from in the spring of the year and the good ones go fast.  We are seeing lots of “tire kickers” out there in the market with little sense of urgency and waiting for just the right deal.  Once they find it there is usually competition.  The under 300,000 market or townhomes and under 450,000 or so for single family homes is very, very active and multiple contracts are quite common on the best properties.   I expect to see the townhome market continue along at the same pace with inventory creeping up slowly.  With over 45 days worth of inventory on the market,  the single family sector is a little more precarious.  The number to watch is new inventory coming on the market.  The sales per month have been very consistent over the past 5-6 years and there is no reason for that to not continue but the number of new listings coming on per month can change that absorption rate quickly.  In April, 54 homes came on vs. 48 in April 2011 and in May, 48 came on vs.  46 in May of 2011.  Small increases but increases none the less.  I am hoping to see it trend downward. That being said inventory is well below last year’s numbers and there is demand as of this writing.  I do think as the election year rhetoric increases and it affects other economic indictors that we will see consumer confidence subside a bit.  I look for the year overall to end up higher than last year but I do expect to see the second half of the year slow down a bit.  As our market continues to unfold I will, as usual, keep you informed. 

Front Lines

Things were a bit slower in May but June was a very robust month in the market.  The single family market saw inventory increase from 62 in April and 41 in March to 71 in May, then drop back down to 56 in June.  This is less than the 72 homes available in June of 2011.   The number of sales was consistent with 39 homes coming under contract in June compared to 32 in April, 33 in May and 33 in June of 2011.    The average list price of what has sold stands at 528,102, up from last year’s (total year) of 501,725.   The average Days on Market increased to 43 from 23 in April and 32 in May but still well down from June of 2011 where it stood at 62.   So while we may be turning our single family inventory over in just over 30 days, with 56 available and 39 sales in a month we have an absorption rate of over just about 1 1/2 months.  The townhome market is looking stronger than the single family home market.  The average Days on Market is 27, up slightly from last month’s 26 and the exact same as June of 2011.  68 townhomes came under contract in the month of June, 10 more than the 58 we sold in May and 9 more than the 59 in April but still not the 76 we saw in March.  It is also down from last May’s 86 but ahead of last June’s 61.   I attribute that to the decrease in available inventory.  Currently there are 49 townhomes available, up from 36 in April but well down from the 72 we had in June of 2011.  So townhomes are turning over in less than 30 days and there is less than a month’s worth of inventory on the market.  The average LIST price of the townhomes that have come under contract so far this year is 296,675 which is up from the 288,486 average for all of 2011.  Another bright spot is that the number of distressed properties (short sales and foreclosures) is still way down from last year with only 8 spread across all the pricing categories!