Absorption Rate – Unplugged

A major focus of this blog site, along with statistics about the Santa Fe NM residential real estate market, is something called an Absorption Rate. On the left side of the site pages you will see the list of spreadsheets and charts available for review. Four of those charts are specific to Absorption Rates and they are in four price categories: all prices and then each of three smaller categories.

What does it mean if your home is approximately in the middle of the price range of $500K to $1 million? What it means is that there is an absorption rate that may apply should you attempt to sell your home. The rate uses averages so is no more precise that throwing a dart at a board, but it is very instructive if understood and factored in to how your home is marketed.

First, the chart for that price range shows four columns; inventory of homes for sale – total homes sold in that range over the last 12 months – average number of homes sold per month – average number of months it would take to sell all of the inventory (from the first column). This set of calculations presumes that only those presently for sale will actually sell and no new listings will come along in the mean time. It is a diminishing return sort of number, even though in reality, homes are withdrawn from the market and newly listed homes show up all the time.

Looking at the fourth column, the number of months entry; this is the approximate number of months it will take for those homes to sell. Let us say you have a home in that range and it is for sale. If the months count is 10 for example, one out of 10 homes will sell each month for 10 months. Each month 10 percent fewer homes will be for sale because they would have sold. A key question to ask yourself at this moment of clarity is: in which month do you want your home to sell? Maybe you are highly motivated and want yours to sell in month one or month two. Next I recommend looking at the other homes for sale in your price range and positioning yours to compare favorably with the competition. If you have a fairly “normal” home and it should be worth about $700,000, what is the asking price? If its much more than maybe $735K, what are you doing? Are you hoping a buyer will come along that cannot tell the difference between your home and another one that might be priced just above $700K?

The charts and graphs and spreadsheets herein are for your use and education. You are always welcome to share, print and quote the content with appropriate attribution. If you think I am an idiot and want to share your criticism, please feel free to contact me and I will try to incorporate your suggestions. There may be no other site that will give you the depth and breadth of information that this site offers. If you know of one, please let me know so I can take a look. I do like knowing what the competition is publishing.

Home sales up 3.3%

The results of 2016 data as reported to the Santa Fe Association of Realtors show a single digit increase in unit sales year over year: 2016 compared to 2015. The headline is the number:  3.3% increase. Overall the total dollar volume also went up, a decent number of 6.44%. The average sales price went up also; but only 3.03%. These numbers and the relevant spreadsheet is available for you to review by selecting it in the right margin (Monthly Residential Solds) which applies to homes, condos, townhouses & modular within the County (and City) of Santa Fe, NM.

Nobody can or should complain about a positive trend in unit sales, correct? The prior year over year (2015 vs 2014) showed up with a 7.8% increase. So we slowed down it seems. The actual increase in unit sales shows up as follows:  2014= 1824  —  2015= 1967  —  2016= 2032, which means the unit count increased by 143 for 2015 and by 65 for 2016. We did slow down a little bit.

That grand total of 2032 units sold in 2016 is still 27% below what we peaked at in 2005, during those red-hot years of liar loans, free and easy money, no doc no cry deals, etc. Still you will find plenty of homes that are worth what someone paid 10 years ago, assuming the did the normal upkeep and did not add-on or do a major remodel and update.

Land sales were hot then too. Many lots were sold in the last decade that still would not bring what was paid for them way back when real estate was great. Shall we make real estate great again? MREGA? Or maybe shorten it to MEGA? That sounds more poetic. Make realEstate Great Again. MEGA – Yeah, we just created a new ad campaign!

Some say the majority of last year witnessed buyers sitting on the fence awaiting the results of the national election. They were hesitant to make their move until they knew what direction the country (and interest rates too?) were headed in. Those same buyers might have had another excuse such as an ingrown toenail so that may have just been a convenient one to latch on to. And now that they waited, what is going on? It seems interest rates are climbing. This blog site does not track interest rates carefully as that information is almost everywhere online, but looking them up might illustrate that waiting was a mistake (if you need mortgage money). Does that mean 2017 will be better? Rising interest rates typically mean fewer buyers can buy so if 2017 is going to meet or surpass 2016, we have some work to do. Get out there and sell a home today.

If you are studying the Santa Fe residential real estate market in-depth, this site has a great deal of historical information you are free to access anytime. No future trends are predicted here. You are allowed to print pages and share them. I do not ask for compensation, but do request that you not brazenly plagiarise my statistics and pass them off as your own hard work. If you do quote me, please do so accurately and fairly. If you do not like the information and wished it showed more sales, that is not my fault and blaming me will only make you look worse. Yes, I have been blamed for being too influential on our market results. The concept is bizarre as if I spoke with a large number of sellers and/or buyers and said things that caused them to change the way they went about doing business in local real estate. Honestly I have lots of opinions (as everyone does) and am not hesitant to share them, but I try to let the hot air escape, staying primarily focused on the facts. It is a fact that there is going to be 12 months this year. I will report on each and every one of them. You can come back as often as you wish.

Lot sales up 10%

2017 saw a modest increase in residential lot sales in Santa Fe city and county reporting to the MLS database for the Santa Fe Assoc of Realtors. 2016 showed a total of 194 sales while 2015 showed 175. This is “modest” since we are still light years behind the volume of sales we experienced thru most of the last decade, topping out above 490 unit sales for six consecutive years ending in 2006. Since then it has been a dogfight just to be relevant and to be optimistic.

Lot sales trend down if people are not buying lots to build. Lot sales trend down when investors are uncertain of the values of lots year after year. Having been burned once or twice on a lot purchase, investors are standing on the sidelines waiting for a more stable and solid market and valuations. There are still a large number of lot sales (of the modest total we are reporting today) that show a sales price BELOW what that seller paid years ago. Would they reinvest in another lot? Without knowing which way the market was going? Not likely.

So any increase in lot sales is likely directly tied to a modest increase in future home owners actually buying the lot they want to build on in the near future. And we are not seeing a large increase in new construction across the board so new homes is not yet a thing we can get excited about. But the shift seems to be underway that will prove up an increase in lot sales again this year and beyond. One might feel that a 10% increase is great, but when you look at where we have been, it feels like a replacement bandage on the one that has been applied in the past. Healing is still taking place.

Please note the following breakdown and analysis of the 2017 lot sales numbers:

Sold prices ranged from $29K to $435K in Las Campanas, with 10 of the 20 lowest priced lot sales of the group of 194 sales. A total of 48 lots sold in Las Campanas.

Of all sales and in various price categories, please note:

91 sales below $100,000. 44 sales between $100K and $150K. 21 sales between 150K and $200K and 22 sales between $200K and $300K. There were 12 sales at or above $300K including one of a subdivision of 15 lots and one super premium lot in a highly desirable part of town that sold well above $1 million.   Average sold price= $142,429    Median sold price= $105,000

Compare to 2006:  561 lots were sold averaging $240K per lot (almost $100K higher than 2016 avg).

Thanks for visiting this blog site and do us all a favor: buy a lot today and build a new home on it. We need the activity and the inventory.  Happy 2017

Sending you our best wishes

…for a great year in 2017. May the numbers you visualize show up on time and may the results you desire come true. Ending 2016 with a solid number of sold homes over the prior 12 months, in excess of the 2000 level, is gratifying and it seems to prove we are on solid ground and not backsliding.

Your image of how you think our market should look is important. It seems we should be in agreement on the following statements. You may not agree, but then we don’t have to be in full agreement.

Interest rates are climbing and will continue to climb during the year. This always means a slight slowdown in buyers purchasing homes. The higher the rates go the more of a slowdown we can expect. It is simple mathematics, not voodoo or blind faith.

New construction seems to be picking up, helping with a dearth of inventory in the lower price ranges, taking pressure off the 40-year-old homes to satisfy the needs of today’s buyers of affordable dwellings. Proposed apartments seem to be quickly approved now also and that will also affect the lower priced inventory as people will have a bit more choice. Of course we hope they buy instead of rent. That is the standard Realtor belief: that everyone should be a homeowner.

The City of Santa Fe seems to be committed to providing high-speed internet access and updated airport facilities (maybe I am dreaming) which experts believe are sure-fire ways to stimulate economic development and entrepreneurial activity. When a business opens and stimulates everything around it (as Meow Wolf seems to be doing), economic development is no longer a mystery. Oh if only we could have ten copies of Meow Wolf please! Proximity is important in real estate. Walking distance is a growing asset in residential real estate. So is being near Meow Wolf, the Plaza and several other locations such as the Dale Ball Trails, shopping centers and schools.

The world of foreclosures and short sales seems to be on the tail end of a long and painful run, though we will still see homes show up in both categories this year. The top broker in unit sales in this market several years ago was a specialist in foreclosures. That is not the case today, but our recovery is still a work in progress. Witness that many homes are not yet worth what someone paid for them nine or ten years ago. When you want a bargain, do you look at foreclosures first? Those days are about over with. So many buyers came away with huge headaches from trying to buy a foreclosure. And of course nobody made a profit except the lawyers (bless them and everyone) and the people doing the winterizing and the repair work.

2017 is going to be a watershed year for many due to unknown future events that some are looking forward to and others are living in fear about. Will Obamacare be repealed, or replaced? Will inflation take off and throw a wrench into our economic gears? How will the Tweeter-in-Chief rule the country? How will his supporters and his detractors heal wounds and work together in this coming year? Will they be able to work together at all? Will our citizens feel safe or will the threat of terrorism grow? Will our forgotten youth and disadvantaged groups be included or excluded in our uniquely American future? Will Christians be able to reconcile their religious beliefs with their demands for making America great again? Is the gap between the haves and the have-nots going to grow or shrink? Does it matter to you? Should it matter to anyone? Is TRUTH an endangered species? Will the Cowboys win the Super Bowl? These important, and not so important questions will be answered this year, maybe.

Please plan a return visit to this blog site on January 10th if you are interested in the most recent monthly numbers plus the 12 month studies of how the Santa Fe residential real estate market is doing. I am working on the annual report of residential lot sales, a 4th quarter report for homes and the rolling 12 month recap, which is showing total sales above the number of 2000 homes. This has been a long time in the making. Can we maintain 2000 plus this year? With your help it can be done.

That mesa is flat

Table tops show their tilt if you put a round object on them and things roll off in the same direction every time. Maybe one of the legs is short? Mesas look oh so level and flat from a distance and then up close you can see small rises and low points that make you wonder how your eyes deceived you earlier. But compared to any landscape in New Mexico, the mesas are pretty flat, you know?

Same description of our market behavior recently. The year is very nearly identical to last year and little time remains to expect large changes. In a good news bad news viewing, the upper end has seen an increase in units sold. And the middle price range I report on also has improved while seeing a drop in inventory. The general range of $500K to $1 million might offer a below average selection of inventory right now. At least it is not as bad as the selection under $500K and even under $300K where quality and volume of inventory is very limited.

This year has been a disappointment for many sellers. A recent tour of homes for sale with a buyer couple revealed some quality inventory that I was surprised to see still available; maybe because the number of buyers did not increase this year. There are some homes for sale now that should have sold 2-3 months ago. But apparently they did not sell as of yet due to the lack of growth in buyer traffic. Buyers can still locate what seem to be good deals in all price ranges if they are diligent and proactive. The lower the price the more competitive it might be so a buyer of a home below $500K is wise to have the ability to move quickly on an offer and have loan applications already processed. Sellers will sell to a buyer that needs a mortgage but they will want that buyer to be ready with their pre-qualification letter.

2016 was a year of many surprises, even with a flat market. And I am not going to start a conversation about the national election because I would certainly find someone who did not agree with me. The consensus seems to be: let us stay focused on real estate in this blog. If your take on our market is different from mine, you have the right to have a different opinion and I will defend your right to have a different conclusion about results than I might have. If you tell me I am wrong, I might not vote for you next time because I am a sensitive new-age guy after all.

Bless all of us as we approach the holiday season and remember there are many people less fortunate than the rest of us. Cold weather is difficult to bear without adequate shelter and nourishment. Be kind and be truthful and be thinking of ways to spend money on real estate soon or you might find a lump of coal in your stocking.

Mi Casa es Su Casa

Third quarter sales figures are in for the Santa Fe residential real estate market, and pardon us if they look almost exactly like the 2015 figures, because they are much the same. We are on the mesa top where it not only looks flat, it is flat. Compare one month, one quarter or an annual rolling total and you will see that our growth in sales units has leveled off to the point that there is no real growth.

Median home sale prices have inched upwards a bit. That can be good for sellers wanting a larger piece of pie leftover after the ravages of contract negotiations and objections. It can make it slightly more competitive for buyers, although that trend is not building any momentum. It is reality that flat is the new normal right now. Variations from a year ago are so small one can barely see change in progress.

But sales are still sales and we enjoyed them to the tune of more than 1950 sales in the most recent complete 12 month cycle. This reflects home sales in Santa Fe city and county. The additional areas our Realtor Association serves (Los Alamos, Espanola, Pecos, etc) includes additional sales adding about 10% to the numbers you will see in the Absorption Rate charts available within this blog site.

It’s a horse race, someone said

The race is on and the unpopular candidates have less than 60 days remaining to garner the required votes to move into the White House in January. Where will you be in January? Possibly enjoying a ski run or watching NFL playoff games cheering on the Clevelands? Or maybe escaping the winter cold and eating seafood on the beach in Mexico? Most of us will be working to provide a safe and warm home for our loved ones and wondering what the next POTUS will be like. Entertaining or scary? Stable or confused? Traditional or innovative? Seems like we really should vote so we can have a say in it.

Our local contest is to see if we can surpass 2015 in residential sales when the wrap is complete on 2016. So far, we can brag about the best single month (August) of unit sales in over 10 years. That is layered on top of zero change, year over year, for the first six months, giving us a splash of confidence with a few more months of results to come…

The monthly residential sales total of 222 units is the most in any single month since July 2006. We averaged 233 a month for the entire year of 2005, so our 2016 monthly average of units sold year to date seems pale when you realize it is only 165. One good month does not boost us enough to counter the flat year we are experiencing, but it is still fun to report we had our best month in over 10 years.

As about 75% of sales are concentrated below $500K, our average sales price has been hovering around $420K to $450K for the last 8 years. 2015 average sold price ($425,331) was still below 8 of the last 12 years.

None of this should be news to anyone paying attention. The trend lines have slowly evolved from an overheated real estate industry ten years ago (with aggressive liar loans and adjustable rates the norm) through a deep trough of pain and foreclosures to now a more stable yet still recovering market. We are not in Denver or Dallas, where sales are fast and sellers are happy. Santa Fe does not always follow national trends and while many experts will tell you home prices are going up and the rate of homeownership is on the rise, it is hard to reveal that exact status here, without facts in support. Yes, the lower price ranges are doing fairly well and they include most sales; so maybe we should be happy? Fact is, we saw the crash last decade as a correction of a real estate industry that was out of control; people buying homes that did not have verifiable incomes and/or a track record of credit. And they put very little money down, so when the going got tough, they had no real equity to work to protect. Today’s market has underlying strength. Nobody can get a loan if they don’t pass the test.

The Santa Fe residential real estate market is steady and predictable and that may be a good thing. Yes we have holes in our bucket and yet we have numerous reasons to think its a wonderful place to live. Many want to build a wall to keep it from growing further, while others readily admit their claim on the area is as tenuous as the wind and scarce as the rain. When you hear “born here all my life” do you chuckle at the grammar or recall that you might have changed someone else’s hometown in a way they do not appreciate? A newcomer makes it her town too. There is room for all of us and hopefully enough water. Now if we can get some victory gardens growing and balance our governmental budgets without such a high dependency on oil and gas, we can be said to be making progress. I am pretty sure the sun shines here almost every day. Or is progress something to fear and distrust? Should we move forward or return to another time when we were great? I can recall that I was great when I won a few swimming races as a child, and aced a few school tests in my teens. And I have progressed since then. Now I have a blog.

You don’t say

What is the background for putting a positive spin on things, even when the facts don’t indicate “things” are all that positive? Is it “the glass is half full” versus “the glass is half empty”? Possibly some folks keep beating the drum that everything is going up and growing and improving knowing they will be counterbalanced by someone else that counts the numbers and puts out a statistical report that shows an objective view. As you likely already know I am of the second school; putting numbers together that tell the story in facts and statistics instead of moods, desires and emotions. And yes I desire a growth in sales as much as anyone else. But wishing and hoping does not make it so. Maybe I could manifest progress by focusing my energy on having healthy shiny white teeth? Or channeling catching a huge fish next time.

We desire to see improvement, we want to get better, but what is going on? Why are sales numbers down in July of 2016 when we have had years of steady and solid growth coming out of the deep economic recession that began almost 10 years ago? July 2016 reports show 30 fewer home sales compared to the same month in 2015. The rolling 12 month count of home sales in all price ranges hit its lowest level in over 18 months. What is your take on the plateau we are on right now? Many blame the lack of inventory for the slower sales numbers. But how can we have 15 months of inventory in the 500K to 1 million segment and say there is a lack of inventory? Three out of four price range reports I publish here show a decrease in unit sales. And the inventory numbers since the 2012 year have been basically level, with slight variations up and down. We have almost exactly the same count of homes for sale in that price range now as we did in 2012 and 2013. Back then you will recall everyone said there was too much inventory. Now apparently their standards have changed and the same number now counts as too little.

The say what? …you don’t say aspect is: who is going to speak up when the market turns flat or turns downward? It is not the typical Realtor style to say the market is changing and slowing down. The usual gig is spouting a sales pitch that says things are getting better and you should get your house on the market now to take advantage. Or you should buy now before all the good homes are gone. Really? 368 listings in Sep 2013 and 371 listings now in August 2016? (between 500K and 1 million)…That is not even a 1% change per year for three years. What are people really saying when they say there is a lack of inventory? One of the first things I hear is it’s all old, shopworn and dated inventory that nobody wants to buy. That is not quite the same as saying there is a lack of inventory. You may be putting your own spin on things to claim the homes for sale are not worthy of your money; a subjective judgment about currently available homes.

What may be most rare is the correctly priced home that someone can afford to purchase & remodel with their final cost coming out fairly close to the newly created value, after the work was done and improvements were made. Plenty of examples exist of homes that are for sale and by most estimates, need substantial work to bring them into the 21st Century. Most buyers will not throw money at a home only to have it worth less than they put into it. For many years one could create equity by buying and remodeling, assuming it was done well and the improvements enhanced the home’s appeal and value. Maybe that is not that common in Santa Fe these days.

Does it matter what anyone says? What most matters is what people with money to spend on housing are doing. They are being quite selective and negotiating prices below asking price, for the most part. Buyers still have the balance of power on their side, except for the rare offering that is a beautiful home that is priced to sell from day one. How does one arrive at a price that fits that definition? “Priced to sell” is a groovy phrase with a good beat and you can dance to it. But where is the hit factory that comes up with these prices? Most Realtors can tell you the right dollar figure, but what is hard to understand is how they can take a hard look at today’s market and state with confidence that inventory is in short supply.

Is MAGIC or VOODOO required to know how to price a home? Not magic, but maybe a sober look at comparable sales with all subjective opinions left out of the formula. Can a seller truly think their home is the best one on the block only to have the proof show up in the resounding lack of interest when it’s listed for sale? Should a seller listen to their Realtor when they discuss the price? Maybe. Maybe not. Ask me for my designation of the two most comparable sales to your home and then tell me why yours is better. We can place a side bet on how the final sales price will be arrived at and what it will be.

Santa Fe residential real estate is a wonderful hobby, and for some a career with great potential. Many place themselves squarely in the forefront of knowledge and experience in terms of knowing our market. Some stand out and others muddle through. Get good, reliable and true information; ask your questions over and over. You don’t get to say if you don’t remember to ask.

A testimony to the numbers

Who goes there? Is that another home listed and sold in our MLS system I see reported today? In the last 24 hours, 16 homes have been reported as Sold in our database. 15 of them had some sort of price reduction during the listing term, or sold below asking price. Only one sold at the asking price, a home in Los Alamos that was below $125 per sq foot and likely did not need to go down any further. But the others showed a consistent trend of pricing strategy that has been the norm here for a long time.

First, a home is listed and the price is usually above what the seller and listing broker expect it to sell for. After a period of time on the market (anywhere from 3 weeks to maybe 3 months) a price reduction is often entered, increasing the pool of buyers. On occasion a second (or even a third) price reduction is entered before interest swells and offers start showing up. And then there may be the renegotiation from the inspection results, where the buyer attempts to get an even lower price based on itemized repairs and deferred maintenance issues.

In some of the 16 reported sold, the asking price remained static, but the final reported sales price was lower, meaning an offer was below asking and was eventually accepted, or the inspections (or other issues) led to an agreement to lower the price. Some may have required several counter offers to arrive at an agreement on price and terms.

If you are a buyer, or their broker, do you automatically see an asking price and know it will have to come down by the time it sells? Is it the norm to see price reductions and prices negotiated lower during the flurry of activity when a buyer wants to tie up a home and the seller wants to sell? Why is the original asking price almost always higher than the final sold price? Would it be prudent to put a home on the market at the price the seller wants to get instead of some price above the one they would settle for in a contract?

What is to be gained or lost by beginning the pricing at the most likely dollar value (what it will sell for) instead of padding the number so buyers can extract some small victory by getting a seller to agree to come down? Do most buyers expect to pay below asking price? I would say yes. Is that because their broker educates them to expect to get a price below asking when they are looking at inventory?  Probably true.

How will this change? Should it change? There are occasionally homes listed that draw immediate attention with multiple offers written and presented in the first week. Those are the exception. And that seems to be because sellers still have high hopes about what their home may sell for, combined with brokers unwillingness to stand firm on their pricing advice. The result may be a longer period of time on the market before a seller gets their net proceeds. And does the seller end up with more money? That is unlikely. It may mean the market is still shy about aggressive marketing and pricing; starting with prices IN the market instead of just going ON the market.

Is this even a problem? Not necessarily, but seller’s do want to sell and today is better than tomorrow. How do we find a way to recalculate our pricing strategies?

Would you want us to emulate Denver, for example, where anecdotal info about 15 offers on a newly listed property are the norm? Are they pricing their homes too low? Maybe. Or is their inventory truly a very tiny portion of the demand for housing. Some buyers in Denver have been trying to buy for a year or more, with no success. They may be careful not to overpay, want inspections and perform due diligence when trying to purchase; so the pushy buyers get in front of them and again they lose out.

I for one would not want our market to look like that. The problem with an overheated market is that it has nowhere to go but down (to cool off). A balanced and steady market, while possibly unremarkable, is preferable because there is time to examine all the details and make wise decisions rather than rushing into something without knowing what you are buying. Could our market improve? Does YES seem like the right answer to that question?

And until we have some more sawdust flying and more building permits requested, there is very little new inventory to pressure resale sellers into pricing their home to sell. The day may arrive soon where one can build a new home and be in the same range of size and quality that they could find in the resale market. Everyone says there is no inventory, or a shortage of inventory. My reply to that is that there is plenty of inventory, but quality product is limited and the mostly average and dated offerings get passed over by so many buyer prospects, they end up saying “there is nothing to buy in my price range”.

How to explain an Absorption Rate of over nine months (the average amount of time it will take to sell all existing inventory in all price ranges)? Does that seem like a shortage of inventory? It is over 27 months for the $1 million plus homes. If you cannot find a home you love within those numbers, building a new home might be the answer you are looking for. What is the definition of a seller’s market? And of a buyer’s market? Based on commonly accepted numbers, a 6 month Absorption Rate is a “balanced” market. Since we are in excess of nine months, that seems like it’s a buyer’s market still, after years of improvement and recovery. It is still the buyer that has the upper hand in negotiations due to the choices they have. The exception may be only in the lower price ranges where a buyer has less to choose from (and the rate of absorption for under $500K is around six months. It is even less below $300K.

We have entered the peak season for our market and now welcome many thousands of visitors to The City Different, some of whom will shop for homes. Let us hope August and September show the results of hard work and pricing that will attract offers and buyers. Then we might end the year with some improvement and keep the momentum of getting stronger. I’m all for that.

Looking for the better half

Half a year does not a full year make, someone said. In the example of Santa Fe area residential real estate, the first half of a year is usually slightly below what the second half comes in at, because of more active summer and fall months. Let us plan on a stronger second half of 2016 since the first half was uninspiring. We could not even surpass the same six months from last year.

The various spreadsheets and charts available to you on this blogsite show the current sluggish nature of our sales market. Many seem to know the reason for the lack of zest and the flat results we are reporting this year compared to last year. Inventory of homes for sale is a factor. Interest rates are not a factor. A serious lack of new construction (above $350K) is a factor. Some might say the struggling economy and lack of new jobs in New Mexico is a factor. I also suspect there is lingering confusion about what Santa Fe residential real estate is “supposed” to look like.

For a few, separating wants and needs is important. We might all want to have a strong real estate market, but what will it take to get us into that mode? Do we need a bunch of new housing to be built? Do we need sellers to put their homes on the market to build up inventory so that buyers have more to choose from? After years when sellers tried to sell and consistently failed, for a long list of reasons, its likely difficult to believe that now is the time to sell. Some have been burned so often they don’t know whom to trust. You probably remember the days when everyone was trying to “call the bottom” of our market (or the national real estate scene). Now it seems everyone is trying to call the middle. We are at a crossroads of steady sales and shrinking inventory, so it cannot be a surprise that sales numbers are flat.

Look at June over the last 9 years (on the Monthly Sales chart). We dipped to as low as 113 homes sold in that month (2009) to as high as 202 homes sold (2015) but now this year we dropped back to 188 sold. That is a 7% drop last year to this year. Look at inventory as of June 30, 2015 versus June 30, 2016 (on All Price Ranges chart). Exact same number of sales for the rolling 12 month total (1944) and inventory is down only by 9 units (1489 to 1480). Does that feel flat to you? What is your proposed remedy? Do we even need a remedy, or are we in a Goldilocks zone with a good balance between sellers and buyers? Are some people hoping for a crazy hot market where homes are selling as soon as they are listed? Is that the answer to anything, other than sellers impatience? Buyers struggle with making offers on homes they cannot negotiate on, feeling forced to buy without careful inspections and the usual contingencies. The market where there are multiple offers is not sustainable, by definition. Sure, some will sell fast and even for more than full price. What about when those homes are gone? I don’t want that kind of market here, personally. Maybe its the Libra in me that prefers balance.

Is a flat market good? I don’t plan to offer a value judgment on our market conditions. I do think the sharp ups and downs of a volatile market hurt more than they help.

What will the second half produce? We remain optimistic for a stronger July thru December (as befits our understanding of historical results) and know that there is no place like home.

If you would like assistance and professional involvement in your real estate transaction, please feel free to contact me anytime. I am happy to consult with you about your real estate assets and how you might best manage them now and in the future.  Thank you.