Analysis of the Hemet REAL ESTATE MARKET Part 2 - SOLDS
By John Occhi, Hemet REALTOR®
Hemet CA REAL ESTATE
An in-depth look at the analysis of SOLD properties covering a 2 year period, broken down by month, comparing the numbers to the previous month as well as the same period a year earlier. This is a close up accurate snapshot of what has really happened in the Hemet Real Estate market - it is not about feel good opinions - it is fact, followed by my personal analysis on a month to month report.
Earlier this week I posted an article where I analyzed the new listings that came on the real estate market in Hemet, California. That post followed what I believe to be an important article on the importance of a REALTOR® studying the local real estate market and taking command of that knowledge by understanding the numbers.
For both the earlier article on NEW LISTINGS and today's on SOLD LISTINGS I looked at the data that was reported by the TEMPO MLS, the MLS vendor for the Hemet San Jacinto Association of Realtors (HSJAOR). The data was strictly for residential properties without any screening - so there are mobile homes and condos in here on the low side as well as some old ranch homes with lots of land. I will look at the SOLD real estate in Hemet CA and compare the 2006 figures to the 2005 numbers.
NOTE: For sake of convenience, I have included the actual figures that I reported on in my previous article. However the analysis is found only in the original article itself. The new data, on the SOLD real Estate, I have set them in BOLD, to help differentiate this data from the previous data. My personal analysis of what has taken place then follows each monthly post and is printed in italics.
JANUARY
2005 176 New Listings Average Asking Price: $284,513
2006 244 New Listings Average Asking Price: $330,717
2005 100 SOLD PROPERTIES AVERAGE SOLD PRICE: $263,687
2006 91 SOLD PROPERTIES AVERAGE SOLD PRICE: $313,175
2006 started the year with a 9% decrease in production (9 fewer homes) over the prior year but there was an approximate 19% increase in value ($49,488) over the previous January.
FEBRUARY
2005 161 New Listings Average Asking Price: $293,613
2006 194 New Listings Average Asking Price: $334,443
2005 101 SOLD PROPERTIES AVERAGE SOLD PRICE: $260,981
2006 75 SOLD PROPERTIES AVERAGE SOLD PRICE: $299,325
February 2006 saw close to a 26% cut in volume of homes sold (26 fewer homes). Although the average sale price did increase by $38,344 (14.75%) it is still $13,850 less (4.5%) than just one month prior.
This will prove to be the lowest average price of sold homes in Hemet CA for all of 2006.
MARCH
2005 206 New Listings Average Asking Price: $313,834
2006 235 New Listings Average Asking Price: $346,458
2005 176 SOLD PROPERTIES AVERAGE SOLD PRICE: $263,494
2006 119 SOLD PROPERTIES AVERAGE SOLD PRICE: $301,843
The start of the spring selling season saw an increase in activity over the prior month, by selling an additional 44 (49% more than the month earlier) homes in Hemet CA; however the production fell short of the 2005 level by 57 homes (32% cut in production).
The Sold price inched back over $300,000 for an increase of only $2,518 (3/4 of 1%) more than the month prior; however the data shows that Hemet CA Real Estate did appreciate by an average amount of $38,349 (14%) from March 2005 to March 2006.
APRIL
2005 206 New Listings Average Asking Price: $304,644
2006 255 New Listings Average Asking Price: $397,921
2005 151 SOLD PROPERTIES AVERAGE SOLD PRICE: $277,713
2006 102 SOLD PROPERTIES AVERAGE SOLD PRICE: $305,770
Just like April 2005, April 2006 saw a reduction in the number of units sold and the average sold price continues to inch forward. There were 32% fewer Hemet CA homes sold in 2006 than in 2005 (49 fewer homes sold in Hemet, CA) and 14% fewer homes sold (17 Hemet Homes) than the month prior.
Comparing the Average Sold Price of Hemet CA Real Estate, their was a 10% increase in the average price from the same period of a year earlier. Comparing the growth to the month prior, the local Hemet Homes that sold saw an increase in value of $3,937 - approximately a 1.25% increase in value.
MAY
2005 217 New Listings Average Asking Price: $306,751
2006 244 New Listings Average Asking Price: $345,423
2005 176 SOLD PROPERTIES AVERAGE SOLD PRICE: $299,570
2006 136 SOLD PROPERTIES AVERAGE SOLD PRICE: $325,375
May is typically one of the best months of the year for Hemet Real Estate. More homes sell every May than any other month - this rule holds true in good years and bad years alike. Perhaps one of the strongest reasons is the kids are out of school and it gives the family the whole summer to acclimate to their new home and surroundings with the minimum amount of disruption to the family.
May 2006 holds true to this rule. There were 34 more homes sold than the month prior (34% increase in productivity) and the average sale price skyrockets to its highest level ever and will maintain the highest average sale price until November.
The increase over the prior month amounted to $19,605 (close to 6.5% in a single month!) which is very close to the $25,805 (8.5% annual increase) difference between the same period the year earlier.
May 2006 not only saw an increase of 34 more homes sold, over the prior month, but did lose 40 valuable transactions (23% fewer homes) comparing itself to May, 2005.
JUNE
2005 225 New Listings Average Asking Price: $332,779
2006 242 New Listings Average Asking Price: $356,342
2005 162 SOLD PROPERTIES AVERAGE SOLD PRICE: $300,452
2006 145 SOLD PROPERTIES AVERAGE SOLD PRICE: $316,920
The volume of sales continues to escalate as the summer selling season is in full swing. 11 more homes are sold (7% more) in June 2006 than the month prior, but unfortunately the number still trails the 2005 results by 23 Hemet CA homes (10% fewer).
The average sale price of all the residential homes sold this month also took a hit from the month prior, dropping $8,455 in average sold price (2.75% reduction). The value did increase over the prior year by adding $16,468 to the average sold price (5.5% increase) for all residential property sold in Hemet CA in June 2006, over the same period a year earlier.
JULY
2005 223 New Listings Average Asking Price: $340,614
2006 237 New Listings Average Asking Price: $339,952
2005 156 SOLD PROPERTIES AVERAGE SOLD PRICE: $305,266
2006 116 SOLD PROPERTIES AVERAGE SOLD PRICE: $307.666
July typically is the end of the prime selling season. Most families have already moved, but there are still those who have not sold their home and so have not yet bought - but the ultimate goal is to be situated by Labor Day.
July 2006 shows 40 (25%) less homes that closed escrow over the same period a year earlier and 20% fewer homes closed than the month prior (29 homes).
The good news is the value of those homes continued to increase - but barely. The home buyer of 2006 only paid an additional $2,400 (less than 1% increase) more than his counterpart a year earlier. By July, sellers are starting to feel the crunch, so it is no surprise that the average sold price took a dip and closed for an average of $9,254 less than they did just a month earlier.
AUGUST
2005 234 New Listings Average Asking Price: $340,643
2006 255 New Listings Average Asking Price: $397921
2005 162 SOLD PROPERTIES AVERAGE SOLD PRICE: $300,820
2006 103 SOLD PROPERTIES AVERAGE SOLD PRICE: $317,397
August 2006 does not follow the pattern of numbers from a year prior. In 2005, August saw more sales (6) than a month prior but the average SOLD price took a small dip $4,446). In 2006, the number of sales decreased by 13 homes (11%) although the average SOLD price escalated by $9,731 over the previous month (3.25%).
Unfortunately, comparing the 2006 results to the 2005 continue with the same pattern of less volume but at a higher SOLD price. The number of homes dipped by 59 homes (tied with December for the largest decrease in volume, for all of 2006) from the level set in August 2005 (36%). Fortunately the SOLD price was significantly higher with a $16,577 increase in the SOLD price (5.5%), over the 2005 SOLD price.
SEPTEMBER
2005 257 New Listings Average Asking Price: $333,468
2006 199 New Listings Average Asking Price: $354,377
2005 157 SOLD PROPERTIES AVERAGE SOLD PRICE: $317,746
2006 103 SOLD PROPERTIES AVERAGE SOLD PRICE: $304,311
If there were any great expectations for September, comparing itself to a year earlier, when the SOLD value reached its then all time high, the analysis shatters that hope. Not only did the number of actual SOLD homes continue to dip in Hemet CA in September 2006 in comparison to a year prior but for the headline news is that for the first time the average SOLD price took a hit from the year prior. Ouch!
First, let's compare the production to the month prior. Both August and September had the same number of closed transactions, reversing the trend from the year prior where September saw a slight dip in volume. However, the average SOLD price lost all of the ground it had gained the prior few months and now is back at the early spring levels found prior to April. Hemet Homes Sold for 4.5% less than a month earlier for a net loss in SOLD value of $13,086.
The comparison of September 2006 to September 2005 continues to follow the same trend in the quantity of closed sales, recording 54 less (34%) SOLD Hemet, CA homes. Again, the disappointment is that the average SOLD price is $13,435 below what it was a year earlier (approximately 4.33%).
OCTOBER
2005 215 New Listings Average Asking Price: $328,349
2006 190 New Listings Average Asking Price: $329,787
2005 140 SOLD PROPERTIES AVERAGE SOLD PRICE: $305,499
2006 97 SOLD PROPERTIES AVERAGE SOLD PRICE: $314,670
For the first time since February, less than 100 residential homes sold in Hemet CA.
October 2006 saw 6 less sales than a month earlier (6%) and 43 less (31%) than the same period reported a year earlier.
The average SOLD price rebounded for Hemet CA residential real estate, showing an increase over both the prior month as well as the same period reported a year earlier. October 2006 saw an increase of $9,171 in the look back at the prior year (3%) and $10,359 difference (3.5%) from just the previous month.
NOVEMBER
2005 102 New Listings Average Asking Price: $342000
2006 189 New Listings Average Asking Price: $354,342
2005 100 SOLD PROPERTIES AVERAGE SOLD PRICE: $319,770
2006 95 SOLD PROPERTIES AVERAGE SOLD PRICE: $339,264
If there had to be a "Best Month of the Year" for Hemet CA Real Estate it would have to be awarded to November 2006. As strange as that sounds, sales volume has leveled off, reporting only 2 less transactions than a month earlier and yet the Average Sold price has set a new record for Hemet CA home owners.
Let's look at the good news first - the average SOLD price is up $19,494 comparing the sales to November 2005 (over a 6% increase). Looking back one month to October 2006, this month showed an increase in value of $24,594 - 8% in a single month!
Even though there were 2 less SOLD properties (2%) taken of the market in November in comparison to October, the good news continues in that there were only 5 fewer (5%) than reported for the same period a year prior. This is the single smallest decrease in volume all year. If this month can be the start of a trend, then 2007 looks very promising for the Hemet CA real estate market.
DECEMBER
2005 129 New Listings Average Asking Price: $332,858
2006 107 New Listings Average Asking Price: $359,855
2005 128 SOLD PROPERTIES AVERAGE SOLD PRICE: $301,340
2006 69 SOLD PROPERTIES AVERAGE SOLD PRICE: $299,567
Just when there was a glimpse of sunshine in November - a little bit of blue sky was on the horizon and then nothing. There certainly wasn't a Santa Clause delivering buyers to Hemet Real Estate sellers this December. Every statistic we look at took a hit - not only a hit, it took what could be called a knock out blow!
Well, I'm just the messenger, not the message, so let's jump in.
Comparing December 2006 to December 2005 there were 59 fewer closed sales (46%) for an average of $1,773 (about .5%) less than the same period a year prior. This is the second month (September being the other) where the Average Sold value went down in a one year comparison. The number of transactions is tied with August for the largest reduction in the number of homes sold, comparing itself to a year prior. This is also the month that has the fewest closed sales (22 fewer than the 91 reported in January 2006) in any of the recorded 24 months of data analyzed.
The comparison to the month prior is just as depressing. There were 26 fewer sales (27%) reported for an average SOLD price of $39,696 (almost 12%) - completely wiping out all of the positive numbers from the prior month.
YEAR IN REVIEW
Let's wrap up by doing an actual comparison to the differences between the year 2005 and 2006, as it is reflected in then numbers related to the SOLD residential properties in the Hemet CA Real Estate market.
For the record, the MLS did not offer a year end report, only a series of monthly reports, so these numbers are my own calculations, based on the data that has been provided in the monthly reports. I mention this because there is some small variance in the calculations.
2005 1711 SOLD PROPERTIES AVERAGE SOLD PRICE: $293,762
2006 1251 SOLD PROPERTIES AVERAGE SOLD PRICE: $312,876
There were 26.85% fewer homes sold in Hemet CA in 2006 compared to 2005.
The average price for a residential home sold in Hemet CA increased by $19,114 which represents an increase of the 2005 level by just over 6%.
What we have seen in the last several years in the Hemet real estate market and all of the Inland Empire and southern California has been run-a-way double digit appreciation of real estate values. It has definitely been a ‘sellers market'. In 2006 the market did a shift and became a ‘buyers market'.
Yes, there are a whole lot less homes that sold in Hemet, and elsewhere in the Inland Empire - but that's OK. What this means is there is a lot less ‘flipping' of properties - the investor art form of buying and selling, letting the appreciation build in a huge profits for investors.
What we are seeing now is a ‘normal' market. 6% growth is great. Anything between a 5% to about an 8% annual growth is considered by economists and the experts as a normal market. It just means that you are not going to get rich overnight investing in traditional real estate deals. There is still no better investment. One thing all real estate has in common is that God is not making anymore of it, so the principals of supply & demand dictate that it will always increase in value, over an extended period of time.
So, if you own Hemet CA Real Estate - feel good about it - if you don't own yet, let me know and we'll see if we can't fix that right away, before the price gets any higher!
Now have a Blessed Day,
John Occhi, Hemet CA REALTOR
http://www.johnocchi.com/
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