First of all, it is a no brainer that foreclosures have made a serious impact on the housing market in Kingman. I wasn't collecting foreclosure specific data until the month of June 2008 so I had to recreate the first quarter data from 2008. I found only a couple of differences from the data I collected last year in the first quarter, but I did not ferret out those differences. At this point it would be like finding a needle in a haystack and because the data in the MLS is subject to Member submission of data it is not a surprise to find a change or two.
So for this comparison I simply used the report I ran for the first quarter of 2008 and am letting the reader know that there are two more reported sales in the data set than there were in my data collections from that time period that appeared in my reports from last year.
If you give this comparison a chance you will see some eye popping information. So lets begin... after the disclaimer of course...
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.
I didn't include average house data like bedrooms, square footage, and age of the average home. The differences in averages for each different category reported below were negligible. Basically the sales and marketing data for the houses sold on average showed a home that had 3 bedrooms, two bathrooms, a two car garage, that was built in the mid 90's, with at least 1,500 square feet of living space.
First up I compare ALL Sales in quarter 1 of 2008 to ALL sales in quarter 1 2009.
Year over year data First Quarter SALES
| Item | Q1 2008 | Q1 2009 | Difference | Percentage Change |
|---|---|---|---|---|
| Total Unit Sales | 85 | 146 | 61 | 72% |
| Average Sold Price | $173,583 | $123,479 | ($50,104) | -29% |
| Median Price | $152,500 | $106,900 | ($45,600) | -30% |
| Total Dollar Volume Sold | $14,754,533 | $18,027,987 | $3,273434 | 22% |
| Average Price per Square Foot | $110 | $79 | ($31) | -28% |
| Days on Market to Contract | 115 | 93 | (22) | -19% |
| Total Days on Market to Sale | 150 | 129 | (21) | -14% |
I know that I've said things like the following before on this blog, but I'll repeat anyway...
Right now this market is actually good for real estate agents -- real estate brokers -- Realtors -- and/or anyone that is offering real estate related services in exchange for fees and/or other forms of commission. Why?? Unit sales are up as compared to the previous year. Maybe, just maybe, more of us in this industry will be able to put something other than Top Ramen on the dinner table this year. I know I just typed that this market is good for agents and the rest, but maybe a better viewpoint is that this market is better than terrible -- which it clearly was last year.
Most folks though, especially those that hate the real estate related service industry, don't really care about how the market is for us. I get that.
So what about buyers in this market?? Well, because there were 72% more buyers in the first three months of this year compared to last, I'd say the market is getting better for buyers... based on price and affordability. So is this a buyers market?? My answer to that is... depends on the buyer. Clearly though more buyers are saying yes to this market.
So what about sellers?? Well if the seller is a bank ridding itself of non-performing assets losing large percentages of investment dollars and paying huge costs of managing those portfolios, maybe. I'll leave that to the banks to decide. For traditional sellers?? Really don't need to offer up an opinion on that picture.
So let's take a look at foreclosure sales ONLY from last year (Q1 2008) compared to this year (Q1 2009)...
Year over year data First Quarter SALES
| Item | Q1 2008 | Q1 2009 | Difference | Percentage Change |
|---|---|---|---|---|
| Total Unit Sales | 31 | 86 | 55 | 177% |
| Average Sold Price | $137,546 | $105,292 | ($32,254) | -23% |
| Median Price | $121,500 | $97,500 | ($24,000) | -20% |
| Total Dollar Volume Sold | $4,236,937 | $9,055,087 | $4,791,150 | 112% |
| Average Price per Square Foot | $89 | $68 | ($21) | -24% |
| Days on Market to Contract | 91 | 72 | (19) | -21% |
| Total Days on Market to Sale | 123 | 107 | (16) | -13% |
Here is your game changer and the leader in the move of the market. Banks are selling non-performing assets at an increased rate of 177% compared to last year. Prices are off around 23% from the looks of it. That decrease in price attracted a buyer in just less than a half a month sooner than the year before.
The increase in unit sales for foreclosures is also attributed to the fact there are more on the market at this time than there were in the year prior, but still there is no doubt that foreclosures moved the market and appealed to buyers.. Also interesting to note is that there were more overall listings available last Q1 (in 2008) than this year (2009) by a rough average of 140 to 150 units in Q1 months.
So these non-human banks managed to increase sales in units over two and a half times, conceded price at a rate of 23% (thereabouts), and cut the marketing and sales time by 19 and 16 days. The non-human banks clearly set the pace.
So let us now see how the traditional sellers stacked up against each other year over year in the first quarter. The following table only shows data comparing traditional sales (think human sellers).
Year over year data First Quarter SALES
| Item | Q1 2008 | Q1 2009 | Difference | Percentage Change |
|---|---|---|---|---|
| Total Unit Sales | 54 | 60 | 6 | 11% |
| Average Sold Price | $194,270 | $149,548 | ($44,722) | -23% |
| Median Price | $161,500 | $125,000 | ($36,500) | -23% |
| Total Dollar Volume Sold | $10,490,616 | $8,972,900 | ($1,517,716) | -14% |
| Average Price per Square Foot | $121 | $93 | ($28) | -23% |
| Days on Market to Contract | 129 | 123 | (6) | -5% |
| Total Days on Market to Sale | 166 | 160 | (6) | -4% |
Traditional sellers adjusted their price concessions at the same rate, 23 percent, as the banks did but only saw marginal improvements in terms of sales in units and improved marketing and sales time.
Meager at best. The 23% concession brought traditional sellers an average of six days improvement in marketing time, yet were lagging bank owned sales marketing time by nearly two months (two months of mortgage payments, two months of utility costs, etc.).
To top that off, production was up in unit sales but not by much, certainly not as impressive as the increase in production the banks enjoyed, if the banks want to call it enjoyment.
I still maintain that there is a premium for a well kept single family home that should be expected for traditional sellers, especially for those that don't come with that 'weird cat urine smell' that comes with some of the foreclosure homes that I've experienced with my buyer clients (the words of a past client, not mine, but a useful description nonetheless). Yet what the comparative numbers suggest, buyers are more willing to take on the challenges that may come with a foreclosed home at the vastly discounted price.
One other factor to consider is that some of these traditional sellers sales fall under the category of 'short sales'. Before you ask I did not mine that data out in this report and really don't have any intention of doing so. Short sales often take more time to close escrow, but seeing that the time to get a contract was basically the same as closing the sale on average, short sales were probably not as prevalent for traditional sellers in either year in the first quarter.
Part three of this report will deal with short sales... look for it in the coming days.
The last comparison I wanted to make was ALL of last years quarter 1 sales compared to ONLY the foreclosure sales of quarter 1 this year. Obviously this years foreclosure sales will have major advantages over ALL sales from last year in terms of price and marketing/close of escrow time, but the units sold figure will show that without the foreclosures the market probably would not look any better for anyone at all.
Year over year data First Quarter SALES
| Item | Q1 2008 | Q1 2009 | Difference | Percentage Change |
|---|---|---|---|---|
| Total Unit Sales | 85 | 86 | 1 | 1% |
| Average Sold Price | $173,583 | $105,292 | ($68,291) | -39% |
| Median Price | $152,500 | $97,500 | ($55,000) | -36% |
| Total Dollar Volume Sold | $14,754,553 | $9,055,087 | ($5,699,466) | -39% |
| Average Price per Square Foot | $110 | $68 | ($42) | -38% |
| Days on Market to Contract | 115 | 72 | (43) | -37% |
| Total Days on Market to Sale | 150 | 107 | (43) | -29% |
Banks are gettin' it done... and my guess is that they will continue to do so until the tide of distressed property recedes. How might that happen??
Well, if you are a distressed property owner facing the prospect of foreclosure, bankruptcy, or something else (like wanting to move out but find yourself owing more principle on your mortgage than what the current housing market will bear)... there are options that could lead to fewer foreclosures in this market.
The federal government seems intent on offering the chance to rework your mortgage with your lender for a lower and more affordable payment, as of yet I have seen nothing solid (I will link to some emails that I have been collecting that describe what the most current plan is... it seems to change week to week).
You could start the mortgage modification process with your lender on your own without waiting for some government plan. You probably should seek out some help with that from an attorney or some other agent/advisor. Please be careful as there are reports of fraudsters and other ne'er-do-wells out there. If you're already in a tough situation, getting the wrong advice will make it worse. I'm not in the mortgage modification biz, nor do I intend to be, so I really don't or can't offer advice on this front.
Other options include... and it just an option... selling your property for as much as you can and if you still end up on the bad side of owing more than your principle than the proceeds of the sale, bringing that upside down amount to the closing table to close the deal. Could be affordable if you are only talking a few thousand dollars, if you have it... probably not realistic in most cases though that involve high dollar amounts.
If you are like most folks in the situation though, the above isn't a real option. Still, there is the short sale route. Below are a couple of links from earlier blog posts I've written... and there will be another on this subject in the coming days, as stated earlier.
Still other things to contemplate would be to rent out the home (but check with the lender and your home owners insurance provider before doing so) as a possibility... there's always waiting until the market values return to your benefit (when that may happen though is anyone's guess, anyone's guess other than mine)... maybe family members can help... and maybe some faith... and maybe just plain old luck.
Beyond any of what you might do, the only other thing I can imagine is an influx of new residents moving to the Kingman area with the ability to afford the homes listed on the market for above current market prices and even above premium market prices. After all, to some our premium prices could look like drastically discounted prices compared to wherever it is they may come from... in this vein I'm thinking about a possible exodus from Kal-ee-FOR-nee-AH and all their new state taxes and IOU's instead of tax returns. Maybe a remote possiblity that could stem the tide of more foreclosures having the impact they clearly have had over the last year. Holding my breath though, I am not.
I doubt that I will attempt to do a quarter to quarter comparison on a regular basis (it was lots of work) but I thought it was important to share with you the results of my curiosity into the changes of the market brought on by lower prices and more foreclosure sales. As always, I'm hoping for better markets, but only the markets will tell us when better days can be shared by all. While currently the market may be better for some, it is clearly still worse on others.
Related posts:
March Sales Report (2009)
Short Sales: Part 1
Short Sales: Part 2
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