Sales Continue To Suffer In July
I had my fingers crossed that the July figures would show an improved selling environment for real estate.
So much for finger crossing and all other forms of superstition.
July was the worst month this year.
As usual let's begin with the absorption rate, which is the inventory turnover and is calculated by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service.
For July, the absorption rate for single family homes was 8.6%. By comparison, it was a robust 51.5% for July of 2005.
July looked even worse for condos. The July absorption rate was 4.8%, the worst I've ever seen. In July of last year it stood at 43.6%.
It was at this time last year that I first began to notice the overall downturn in the real estate market. That downturn has continued unabated. So, for those of you who keep track of such things, we've been in a declining real estate market locally for about one full year.
The median price has fallen as well, so if you're selling you need to keep this in mind when setting your price and negotiating with a prospective buyer. The fact is that the median price for a single family home now stands at $230,000. In July 2005 the median was $256,600 -- quite a big drop. For condos, the median in July was $170,000 as compared to $185,000 for July 2005.
It appears to me that prices are now being lowered by the overall softening of the real estate market. For buyers, that's really great news. For sellers, it's time to get realistic about your property's value in today's new market. If you didn't get your property sold during the first half of 2005, you've probably missed out on the opportunity for really high dollar sales figures until the next big uptick in the real estate market -- and nobody knows when that will be.
Single family home listings are soaring! In July, there were 9,549 single family homes listed for sale in the MLS. In July of 2005 there were only 2,552. If you're selling a home today, this means your competition has increased by 375%, almost a quadrupeling of homes on the market. And this does not account for homes that are not in the MLS but are for sale directly with their owners -- FSBO's usually account for about 10% of the total market of available single family homes.
Single family home sales are lagging! July was simply a terrible month for home sales. Only 825 homes were sold. By comparison, in July 2005, 1,314 single family homes were sold. Quite a drop.
So, for single family homes we have loads of property on the market and apparently a shrinking number of people willing to buy them. Sounds like the formula for a pretty strong buyer's market to me.
How did condos fare? About the same. But I think condos and towhhomes have another problem and it is even more serious. Overbuilding.
Condo listings continue to skyrocket! Condo listings have been moving upward at a fairly steady rate all year, and July was no exception. The MLS for July shows a total of 6,194 condo units for sale. Only 1,486 were for sale in July of 2005. That's a very significant jump in inventory in a twelve month period. Is the condo/townhome market overbuilt?
Condo sales continue to fall! Despite all those beautiful new condos on the beach and the stunning townhomes going in downtown, few people seem interested in buying condominiums and towhhomes anymore. I guess all those speculators who drove up sales and values have gone away and are putting their money in other types of investments. As a consequence, condo sales in July fell to their lowest level in 5-1/2 years. Only 299 condos were purchased in July, as compared to 648 condo sales in July 2005. I think the bloom is off the rose when it comes to condo/townhome sales.
For condos, it appears that we have a glut of inventory and a lack of interest in purchasing. Condo sellers and developers need to respond with incentives to get more buyers back into the condo market -- and they need to do it quickly. This is sure a good time to be a condo buyer. You should be able to drive a real hard bargain and obtain loads of consessions from sellers and developers. The watchword in buying condos is clear: "Ask and you shall receive."
Well, folks, there you have it. I wish it was better news for sellers, but those are the actual facts and you'll have to respond accordingly. For buyers, it's your time so take advantage of it. Mortgage rates are still at an historically low level although they are creeping up. I'd act now if I were in your shoes.
What's my prediction for Agusut? Well, historically the overall absorption rate for August has been less than that for July, so I expect another drop in the absorption rate. Perhaps I'll be wrong, but I wouldn't count on it -- I've got years of data spread out all over my desk as I make my prediction.
For more information about real estate matters, visit my website at www.thestpeterealestatesite.com.
So much for finger crossing and all other forms of superstition.
July was the worst month this year.
As usual let's begin with the absorption rate, which is the inventory turnover and is calculated by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service.
For July, the absorption rate for single family homes was 8.6%. By comparison, it was a robust 51.5% for July of 2005.
July looked even worse for condos. The July absorption rate was 4.8%, the worst I've ever seen. In July of last year it stood at 43.6%.
It was at this time last year that I first began to notice the overall downturn in the real estate market. That downturn has continued unabated. So, for those of you who keep track of such things, we've been in a declining real estate market locally for about one full year.
The median price has fallen as well, so if you're selling you need to keep this in mind when setting your price and negotiating with a prospective buyer. The fact is that the median price for a single family home now stands at $230,000. In July 2005 the median was $256,600 -- quite a big drop. For condos, the median in July was $170,000 as compared to $185,000 for July 2005.
It appears to me that prices are now being lowered by the overall softening of the real estate market. For buyers, that's really great news. For sellers, it's time to get realistic about your property's value in today's new market. If you didn't get your property sold during the first half of 2005, you've probably missed out on the opportunity for really high dollar sales figures until the next big uptick in the real estate market -- and nobody knows when that will be.
Single family home listings are soaring! In July, there were 9,549 single family homes listed for sale in the MLS. In July of 2005 there were only 2,552. If you're selling a home today, this means your competition has increased by 375%, almost a quadrupeling of homes on the market. And this does not account for homes that are not in the MLS but are for sale directly with their owners -- FSBO's usually account for about 10% of the total market of available single family homes.
Single family home sales are lagging! July was simply a terrible month for home sales. Only 825 homes were sold. By comparison, in July 2005, 1,314 single family homes were sold. Quite a drop.
So, for single family homes we have loads of property on the market and apparently a shrinking number of people willing to buy them. Sounds like the formula for a pretty strong buyer's market to me.
How did condos fare? About the same. But I think condos and towhhomes have another problem and it is even more serious. Overbuilding.
Condo listings continue to skyrocket! Condo listings have been moving upward at a fairly steady rate all year, and July was no exception. The MLS for July shows a total of 6,194 condo units for sale. Only 1,486 were for sale in July of 2005. That's a very significant jump in inventory in a twelve month period. Is the condo/townhome market overbuilt?
Condo sales continue to fall! Despite all those beautiful new condos on the beach and the stunning townhomes going in downtown, few people seem interested in buying condominiums and towhhomes anymore. I guess all those speculators who drove up sales and values have gone away and are putting their money in other types of investments. As a consequence, condo sales in July fell to their lowest level in 5-1/2 years. Only 299 condos were purchased in July, as compared to 648 condo sales in July 2005. I think the bloom is off the rose when it comes to condo/townhome sales.
For condos, it appears that we have a glut of inventory and a lack of interest in purchasing. Condo sellers and developers need to respond with incentives to get more buyers back into the condo market -- and they need to do it quickly. This is sure a good time to be a condo buyer. You should be able to drive a real hard bargain and obtain loads of consessions from sellers and developers. The watchword in buying condos is clear: "Ask and you shall receive."
Well, folks, there you have it. I wish it was better news for sellers, but those are the actual facts and you'll have to respond accordingly. For buyers, it's your time so take advantage of it. Mortgage rates are still at an historically low level although they are creeping up. I'd act now if I were in your shoes.
What's my prediction for Agusut? Well, historically the overall absorption rate for August has been less than that for July, so I expect another drop in the absorption rate. Perhaps I'll be wrong, but I wouldn't count on it -- I've got years of data spread out all over my desk as I make my prediction.
For more information about real estate matters, visit my website at www.thestpeterealestatesite.com.
-30-
posted by Terry Ward at 2:53 AM
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