This report is courtesy of the Cromford Report.
Sellers at the low and medium price ranges have some valid reasons to feel hopeful as we head into the prime selling season (January through July).
Buyers are certainly not in trouble yet, but they need to keep an eye on supply. If that starts falling early this year we could see the re-emergence of multiple bids over the next 21 months.
January was a mixed bag.
Supporting the pessimists we saw weaker sales counts than last year (down 1.7%) and lower prices than in December (median down 1.0%, $/SF down 0.8%). We also witnessed the pending listing count failing to beat last year, though it did rise 27.7% during January.
Supporting the optimists, the active listing count (excluding UCB) rose only 6% during January and remains 6.2% below the same point in 2014. More importantly, the under contract count rose 30.5% during January and finally overtook last year, beating it by 2.1%.
Overall it looks like a reasonable but not at all spectacular start to the year. Supply remains weak, especially at the affordable end of the market. At the top end supply is starting to pack on weight and sellers of luxury homes are going to be facing more competition.
Contract activity is definitely looking up, although this is strongly weighted towards UCB status and away from pending status compared to earlier years. As long as we assume that most agents are using UCB “incorrectly” and that most of the UCB listings would have been designated as pending six years ago (pre Zillow’s dominance), then the picture looks consistent with a very modest recovery in demand. 34% of normal listings under contract are now coded as UCB. Six years ago this was just 7% (when it was called AWC). The shift towards UCB has been strong and relentless and is still moving in the same direction.
Sellers at the low and medium price ranges have some valid reasons to feel hopeful as we head into the prime selling season. Buyers are certainly not in trouble yet, but they need to keep an eye on supply. If that starts falling early this year we could see the re-emergence of multiple bids over the next 21 months.
Here are the basic ARMLS numbers for February 1, 2015 relative to February 1, 2014 for all areas & types:
- Active Listings (excluding UCB): 23,950 versus 25,541 last year – down 6.2% – but up 6.0% from 22,604 last month
- Active Listings (including UCB): 27,095 versus 28,413 last year – down 4.6% – but up 8.7% compared with 24,918 last month
- Pending Listings: 5,631 versus 5,723 last year – down 1.6% – but up 27.7% from 4,410 last month
- Under Contract Listings (including Pending & UCB): 8,776 versus 8,595 last year – up 2.1% – and up 30.5% from 6,724 last month
- Monthly Sales: 4,781 versus 4,862 last year – down 1.7% – and down 26.1% from 6,466 last month
- Monthly Average Sales Price per Sq. Ft.: $130.87 versus $125.54 last year – up 4.2% – but down 0.8% from $131.87 last month
- Monthly Median Sales Price: $195,000 versus $183,000 last year – up 6.6% – but down 1.0% from $197,000 last month
The first time home buyer is critical to the next stage of the recovery. Some writers point to signs of the Millennial generation becoming home owners in normal numbers at last. I am not seeing convincing evidence of that yet, though that could be because it is still too early to detect. Those involved in credit repair appear to be busy, so I suspect improvement in demand may be more connected to former home owners coming back onto the market after their long time-out in the penalty box.
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