This past week our listings saw an average of less than one showing each. Traffic is terribly slow across the board right now. I’ve been reaching out to other Realtors and studying showing statistics and everything points to the same message….very little traffic in the past two weeks. Just as it was impossible for the market to sustain such a high number of sales as we saw in 2006 and 2007, I believe it is unsustainable to have such little activity. There has to be a surge of activity looming. Maybe in the coming weeks or maybe not until spring. But it has to be coming.
Recently, I reported the real estate stats for August Mecklenburg County home sales in my monthly E-Newsletter. I was very intrigued to see that in such a slow market, the average sales price had increased by 16% over the same period from last year even though the total number of sales had dropped by 22%. I had to investigate.
Below is a chart comparing the number of home sales and the average sales price by price point for August 2009 vs. August 2010:
Price Range # of Sales Average Price
$0-$100,000 -5.4% -10.4%
$101K-$200K -39.9% -0.4%
$201K-$400K -14.9% 0.3%
$401K-$600K 9.6% 3.2%
$601K-$1M 72% 7.4%
$1M+ 18.2% 3%
The low end real estate sales were down slightly and overall prices were down 10%. Some of these sales could have been impacted by the first time buyer credit which explains why the number of sales are down from last year. But much of this property is also investor owned property which is more likely to end up in foreclosure. My guess is that the majority of the sales in this lowest bracket were foreclosures and the banks were willing to sell at rock bottom prices just to get rid of the inventory.
The price point from $101K-$200K saw a 40% reduction in sales over the same period last year. This is where most of the first time buyer sales happened so it makes complete sense that this bracket is down now that the tax credit has expired. Demand for these properties was artificially moved into the first half of the year causing it to fall in the second half. Interestingly, these properties have held their value since last year likely because there were plenty of solid sales comps from earlier this year to justify the current prices.
From $201-$400K, we saw a 15% drop in sales but prices remained flat. My explanation is similar to that for the $101K-$200K homes. Many of these were affected by the tax credits, but clearly not as many when the prices rose closer to $400K.
Sales from $400K-$600K rose nicely (9.6% higher) from last year and prices even rose slightly. Not much was selling at this price point last year. This year, many of the sellers who sold their home to tax credit buyers were able to trade up and buy in this price point.
Here’s the big surprise…sales in the $600K-$1M price point rose 72% from last year. This is because the sales last year were virtually non existent, so basically any improvement this year would result in a large percentage increase. Sellers of higher end real estate were really in trouble last year, so it is nice to see that this price point has opened up some even if its just a little bit.
Sales over $1M improved by 18% and prices rose by 3%. The explanation here is similar to the $600K-$1M bracket, just less dramatic.
Because of the sheer dollar value of the real estate represented by the mid to higher end sales, the average sales price for the overall market has shown an increase. But clearly these numbers show that this does not paint a completely accurate picture. First time buyers had their day earlier this year. Now the money is opening up slightly for the higher price points. We have a long way to go. But one thing is for sure, increasing prices follow increased sales. Until we see improvement in volume, prices aren’t going to rise.