My enthusiasm in the October report, while somewhat tempered, remains alive with the November numbers I have just received. For the second straight month I believe the stats suggest we may finally be bouncing on the bottom of the downturn that has been going on for all of 5 years now. Barring some unpredicted national/international event I am hopeful that the current trends will continue and possibly even improve a bit. Recent unemployment figures have been slightly better both on a national and local scale. Consumer spending and confidence have also ticked up. All of these things do affect our real estate market just as events in Europe and the 2012 elections also may.
519 Homes sold in Ada County in November, a 4% increase from 2010. Pended sales were also up a healthy 9.7% while inventory continues its trend of most of the year and plunged 33.1%. There are literally one third fewer homes on the market than at this time last year and I have seen the effects of that first hand with the buyers I am currently working with. There seem to be few quality choices and in the sweet spot of the market ($100-150K) there is pretty intense competition between buyers. Distressed sales continue to be a dominant force but the trend seems to be swinging away from Bank Owned properties and back towards Short Sales. So while the Days on Market for non-distressed sales in that price range is 81 (24.3% below last year), for distressed sales, particularly short sales, it is 162 days. This indicates that banks still haven’t mastered dealing with short sales in a timely manner and that there is strong demand for non-distressed sales in that price range. Days on market for all price ranges has dropped 15.7% to 97 days since 2010 reflecting that more buyers are out there but don’t have as many choices as they used to. Months of inventory is currently at 4.6 versus 7.2 last year. You may recall that most analysts feel 6 or below represents a stable to robust market and we have been 5 or below since March.
The big news in October was that for the first time in over 4 years prices actually inched up a tiny bit (.6%!). I was holding my breath for the November numbers to see if that was a fluke or perhaps the beginning of a trend. The answer so far lies somewhere in between as the average price per square foot dropped by $1 from October 2011 to $88 but was unchanged from November 2010. The average sales price was $175,000 which was a 3.3% drop from November 2010 but was unchanged from this October. The 3.3% drop may be slightly misleading as there was an inexplicable one month spike in the average sales price last November. I think the most encouraging thing I gather from both the average $/SF and the average sales price numbers is that they have been remarkably steady since June. After 4+ years of drops that is pretty good news. So while I certainly don’t foresee any dramatic price increases it is beginning to look more and more like things have steadied. High unemployment, tougher lending standards, consumer caution, and the growing number of people with good income who are unable to buy homes because they have already lost or short sold one will continue to keep a lid on prices. But the blood-letting may be mostly over, although people who bought at the peak and have to sell are going to continue to feel pain for years to come.
As always your questions, comments, and especially your referrals are always welcome.
Best wishes to all of you this Holiday Season!