The local Market Dynamics report of Sales Absorption clearly shows and improvement over the 2010 year for both January and February of 2011. For the purpose of this blog post I'm going to stick with February and give you a brief analysis of the current trends year over year.
Here are the numbers and we can draw a few conclusions from them if we take the time to study them.
Time %prop under contract %prop for sale #prop for sale #prop under contract #prop sold
Feb 2011 13.8 8.4 3926 543 331
Feb 2010 10.0 7.7 3960 397 304
A very significant part of this is the first column; notice the increase in the percentage of properties under contract is up almost 4% which means the buyers are buying and the realtors are doing a better job of building value in their proposition to purchase immediately. Waiting in this market is actually a bigger risk than purchasing; first we need to consider lending however; more importantly we need to consider interest rate adjustments. On a $100K home saving 10% off the list price would actually cost you more over the life of the loan if the interest rate increased just one half of one percent. As a side note it's virtually impossible to pay "over market" if you're looking for the deal of a lifetime, the only other "over market" purchases I'm seeing are an individual's desire to purchase their dream home, in cash at any price and that exists in all markets.
The percentage of properties for sale has increased to 8.4 from 7.7 and that can be attributed to a few factors, first of all there's more cash in the marketplace and sellers know it so it is advantageous for them to place the property on the market at a fair price now. Also, some new construction has occurred locally and over the last year investors have purchased many of the lower end properties, refurbished them and placed them on the market as well. This is over and above the availability of REO properties and a positive sign for our market. It does not necessarily mean more people are "selling out" but more people are buying and sellers see the cash in the marketplace.
Also, to defend the above conclusion the months of supply would support the data, from February 2010 when there was 8.4 months of inventory (11.0 according to NAR) there is now only 5.7 months of inventory (9.4 according to NAR). In other words, there are more homes on the market but they are selling more quickly no matter who's numbers you're following; the local or NAR.
Notice the properties under contract, from 2010 it was only 397 and today its 543, that an increase of 146 written contracts across our board in one month from last year February to this year February. This is why it's so critical to look at your LOCAL data and NOT listen to only the news on TV for your real estate market analysis. While other markets may be contracting and experiencing "more of the same" we, in Charlotte County are seeing significant loosening of our market and overall volume increasing over last year.
Finally, were seeing an increase in the number of homes sold, 331 over 304 from the previous year. Although this may not seem on the surface like the magic shot of penicillin our industry needs to recover it is truly a great increase over the previous year. Although the median home price is down almost 6K from February of 2010 it simply means we've found the bottom and the prices are bouncing only a few dollars as compared to the drastic reductions in both pricing and values we saw years past.
All in all in my opinion we're beginning this leveling process and a sense of normalcy is returning to the marketplace locally in Charlotte County. If you'd like any more information on the local market or would like have any further explanations please don't hesitate to call me directly. I'd love to meet with you and discuss the market based on factual numbers.
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