These market statistics of actual sales and unsold inventory show a continuing solid real estate market. It is smaller, in lower volume, but for the volume we have, home values and turnover remain good and much stronger than the rest of the U.S.
Here's some key hard data from the actual sales and for-sale listings.
Last March we had about 11.5 months of unsold inventory on hand (the number of months to sell all currently unsold homes at the current rate of sales, assuming no new listings are posted). Now it is down near 6 months of inventory. That is very healthy, headed in to the winter doldrum season in two months.
Last March the median "days-on-market" for homes sold that month was 0.39 days per thousand dollars of home price. It is now nearly 25% lower, at 0.30 days per thousand dollars price.
The market of transactions that we do have is strong. It's just that there is less volume. Fewer sellers, fewer viable* buyers, fewer homes, fewer sales. It's as if Rapid City and it's entire real estate sales market had gotten smaller, while remaining stable in prices, days on market, etc.
Where's the local real estate market headed near term?
But a perfect storm may be looming in local real estate. We may be in for even further shrinkage of the market. The chart above shows that we're flushing listings. Pending sales are way up for the year. The rate of incoming new listings is declining. The number of listings that are expiring is on the rise. That may imply a shrinkage in the 'available for sale' (supply side) inventory.
On the demand side (buyers) some reputable lenders are telling me that despite the Federal homebuyer incentives, it may get even more difficult for buyers to obtain loans to buy. They say this in connection with FHA's announcement this week, on top of other issues, involving appraisals, the nationwide mortgage underwriting market, mortgage interest is likely not plummeting much lower, growing unemployment trends and more.
Nationally, the Federal Housing Finance Agency announced national market figures and trends. The Housing Price Index (HPI) in mid-summer was up a whopping 0.3% in July from prior June. That translates to a whopping 500 dollars on a median priced home in our Black Hills market. More telling of the national market, is that the HPI is down 4% from the prior year, and down further, 10.5% from The Bubble's peak in 2007. That matters most to you if you are selling to, or competing with buyers from, one fo those 35 worst real estate market counties in five states.
What does all this mean for you?
Well, if you're one of the growing number of sellers and buyers lurkingon the sidelines waiting for things to improve, it means little. But if you're buying or selling it means that alongside location, location, location as the key factors in real estate decisions, we now have timing, timing, timing.
It is becoming as important when you buy, and when you sell, as where.
And here's a thought I'll leave you with. The best time for buyers to buy may become even more disonant with the best time for sellers to sell. I wonder if we could see buyers and sellers independently "season-shopping."
In either case, if you're either a buyer or a seller, if you have a deadline you also have a problem. But, then, it's always been that way in real estate.
What are your thoughts on the local market?
Posted by Lee Alley, www.BHhomes.INFO, Rapid City, Black Hills, SD at 9:27 AM
Labels: Market Conditions
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