I have to admit that part of me wants to leave this sales report right there with no further explanations. Sales are up... sales are up... but really does it matter?? Last year, last February was the worst month that I've recorded for sales in the study area I track data from. This year with banks selling foreclosed inventory at lower level prices than I have data records for (2004), this rise in unit sales is not a surprise at all.
More information, data, and thoughts in a bit... but first, the disclaimer...
Disclaimer... all data compiled for this report comes from the WARDEX Data Exchange and does not include any sales activity from outside that resource. All research is done only on single family homes and there is no inclusion of modular homes, commercial properties, or vacant land. The geographical area researched includes; all areas within the boundaries of the city of Kingman, north Kingman, the Hualapai Mountain area, and the Valle Vista subdivisions. Click here to see maps of the included area's.
Listings and sales in units chart:
Obviously we are still looking at a surplus of inventory issue in this market... but the slow part of the selling season is over and perhaps the red line begins to gain on the blue line a bit to close the gap. One thing is for certain, the market cannot take on as many listings as it has been -- unless the new listings are priced accordingly for a realistic sale.
Average listings and sales averages chart:
Put yourself in the shoes of a soon to be seller in this market. It is easy to beat the competition IF -- you can afford to do so. I have a hunch that the red line continues in a certain direction until the surplus inventory issue begins to go away in earnest.
2005 through 2008 unit sales chart:
So far sales in at the same level they were in 2007 (is why you can barely see the orange line), in fact the same number of sales through the first two months. In case you forgot... 2007 wasn't all that great of a year for the housing market. What looks to be good news though at this point is that current pending contracts are up over 2007 levels and if all goes well at the closing table, unit sales could break from the pack and head to the plus side of things.
2005 through 2008 average price chart:
Gonna need to adjust the scale soon I bet. Here's what helped the unit sales figure jump 115% year over year... the average priced sale dropped 33% from last year (down 42% from 2006).
Anyone ready to call the bottom yet?? I'm not.
2005 through 2008 median price chart:
The median price dropped 35 percentage points compared to last February, and is down 50% compared to 2006 (yep... you read that right).
The price range of all sales in February 2009 was from $25,600 - $301,750
Average SFR statistics:
Data tables for all sales tracked in February 2009
|Item||Feb. '09 |
|Average Price per Unit Sold||$118,437|
|Median Price per Unit Sold||$102,600|
|Average Price per Square Foot||$75|
|Ave Living Space per Square Foot||1,574|
|Days on Market to Contract||95|
|Days on Market to Close||128|
|Price Reductions on Market||$17,981|
|Negotiated Price Concessions||$7,159|
|Total Price Concessions||$25,140|
|Total Percent Conceded||17.5%|
I usually do not make remarks after this chart, but if you are that potential seller and want to estimate what your home might sell for -- take your square footage of your home and multiply by $75. It will give you a round number somewhere in the ballpark. And you will see in the table below, the spread between foreclosed sales and traditional seller sales was not that far off in February.
This chart still says that seller are asking way too much for their property on the market, as the chart is not trending in one direction or the other.
This table below went over pretty well last month based on emails and comments. I'll continue to break out the data like this as long as the foreclosure impact is as severe as it has been.
Traditional Seller vs. Bank Owned sales comparison for February 2009
|Item||Traditional Seller ||Bank Owned|
|Total Units Sold in Month||16||27|
|Average Price per Unit Sold||$132,884||$109,876|
|Median Price per Unit Sold||$99,900||$104,750|
|Average Price per Square Foot||$82||$71|
|Item||Traditional Seller||Bank Owned|
|Ave Living Space per Square Foot||1,619||1,547|
|Item||Traditional Seller||Bank Owned|
|Days on Market to Contract||115||82|
|Days on Market to Close||145||118|
|Price Reductions on Market||$26,203||$13,109|
|Negotiated Price Concessions||$8,453||$6,392|
|Total Price Concessions||$34,656||$19,501|
|Total Percent Conceded||21%||15%|
Again, it is easy to see that without the foreclosures there wouldn't have been an increase of unit sales to the tune of 115%, in fact there would have been a decrease. It is no secret, price is key. In fact it is THE key in marketing property at the moment. Just look a the concessions of the traditional sellers above for that key.
In fact, foreclosure sales held their ground in terms of average sales price and price per square foot compared to last year. Traditional sellers did not.
However, traditional sellers did make up ground in terms of time on the market to attract a buyer and close of escrow... but they probably did so because of the price concession. It is all coming back to price and it will continue to do so until A) the surplus inventory goes away, B) the inventory of bank owned foreclosures is reduced, and C) the economy improves.
I've covered most of the conclusions already but I'll sum it up... prices are down and sales are up.
Until next time.