Now that the summer picnics are behind us and the kids are heading back to school, we look forward to cooler days and nights. Let’s take a look at the July numbers in the rear view mirror to see if there are any indicators as to what lies ahead in the coming months.
(Click on images to enlarge)
Settled Units – Even though the inventory of homes remains tight, our numbers continue to hold steady when compared to last year at this time which bodes well for the local market.
Average Sales Price – A twelve percent increase is the biggest year over year jump in quite some time. Typically, when we see big jumps like this it is an indication that the market might be overheated which is not a good thing. As we will see when we look at absorption rates, I think this increase is due to the upper end of the market starting to loosen up which is long overdue.
Median Days to Sell – This number continues to hover at about two weeks. If you’re a seller and your home has been on the market for a month without an offer, you need to get more realistic with price. Don’t let your home get stale.
Average Interest Rate – They are down almost a full percentage point from last year. If you’re a buyer trying to secure a thirty year, fixed rate mortgage of $200,000, that’s a difference of almost $90/month or $30K over the life of the mortgage.
Absorption Rates are the rates at which available homes are sold in a specific real estate market and price range during a given time period. It is calculated by dividing the total number of available homes by the average number of sales per month. The rate represents the number of months it would take to clear out available inventory if no other homes came on the market.
We are finally seeing some movement in the luxury market. For months, homes over $500K+ have been lingering on the market with an absorption rate of over 12 months. We are now approaching equilibrium in this price range. This is the biggest reason why the average price in the county has shot up. Overall inventory continues to be tight which will more than likely cause aggressive gains in the average priced home in the coming months.
Until next month – – –