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From the Triangle MLS, for all of the triangle region
Sales down 19% year over year
Active listings up over 24% year over year
Prices up 0.5% year over year
Total sales for 2007 are down 6.5% for the year compared to 2006, and about 2% lower than 2005 total sales.
For Wake County :
Sales down over 22% year over year
Active listings up nearly 30% year over year
Prices down 2.4% year over year
The biggest surprise to me is the hits to the prices. November year over year numbers were +6.2% (Triangle) and +3.6% (Wake) so the December numbers took a big jump down. Is this just noise in the data or the start of a trend? Median prices are generally a bad way to judge the price movement of homes, so I'm not going to read too much into this yet, but the big change from Nov data caught me by surprise.
The active listings and sales numbers continue to be bad compared to this time last year. There's now 6 months of consecutive YoY drops in sales volume, and basically a year of 10%+ YoY growth in active listings (Jan '07 was +8.6%, close enough). I wish I could post Excel graphs here since this trend is much more dramatic in pictures than in numbers.
At December's rate, there's a bit over 8 months of inventory in the market. This isn't the best way to measure things since sales are seasonal, but last year at this time there were just 5 months of inventory. This same trend is apparent if you use average sales and inventory numbers over trailing 6 month periods to try and smooth out some of the seasonal influences so the trend is real even if the actual months of inventory count isn't 100% accurate.
Does anyone have data going back earlier than Aug 2004? That's the earliest that's on the Triangle MLS web site, but there should be stuff going back earlier. Working with only 2.5 years of data makes it hard to see what normal is, and probably makes the market look worse than it is (late 2004 - early 2005 is when the bubble started hitting here, so all the comparisons are against bubble-ish data, not normal market trends).
The MLS data has them split into Durham, Johnston, Orange, Wake, and Other. Other is helpfully defined as "all remaining areas", so your guess is as good as mine on that one.
Durham looks to have less increases in inventory (+7.5% year over year in Dec, +13% last month) and their sales haven't fallen off quite as much (-9.x% YoY each of the past few months). The trend is the same, but the magnitude of the changes is less than the overall Triangle.
Johnson active listings are worse than Wake YoY (+20% to +30% for the past year) and sales are about the same reduction as Wake (slight blip this month with only -7% Yoy, but the previous months were in the -20 to -25% range). Call this slightly worse than the overall numbers, but not enough for me to be confident about that difference actually meaning anything significant.
Orange is about the same as Wake for increases in listings (about the same % change for the past few months, but they had worse declines earlier in the year), and the sales numbers are slightly better Yoy than Wake but nothing significant in my opinion.
I'm not sure what Other actually covers, but in any case it's not too different than the rest.
The data is noisy so month to month changes don't mean much. The overall trend is important, and even though the numbers are a bit different, the charts look close. So basically, even though Wake dominates the raw numbers (about 4x higher number of sales than the next closest county) the rest of the counties are more or less in line with the averages reported for the Triangle.
You can get the data yourself pretty easily. A Google search for triangle area mls statistics will get you there (pick the 2nd link returned in Google), click on "monthly stats" and pick the year and month you're looking for will return the results. They're very easy to read and you can probably just cut and paste them into excel to crunch them any way you'd like. For % changes, I'm using (this year - last year) / last year as a formula. None of my other complex insights are reliable enough to want to duplicate :P
I have a question on how the selling price is calculated...Last weekend we took a look at some local homes where the builder had increased the price slightly relative to last year but was offering a $40k incentive on a $360k house. To me it seems like he just dropped his price better than 10%. Are the "incentives" included when calculating the price of the home for comparisons?
Last weekend we took a look at some local homes where the builder had increased the price slightly relative to last year but was offering a $40k incentive on a $360k house. To me it seems like he just dropped his price better than 10%. Are the "incentives" included when calculating the price of the home for comparisons?
I use sales price for comps. Builders will always like to give incentives and upgrades rather than drop the price.
I have a question on how the selling price is calculated...Last weekend we took a look at some local homes where the builder had increased the price slightly relative to last year but was offering a $40k incentive on a $360k house. To me it seems like he just dropped his price better than 10%. Are the "incentives" included when calculating the price of the home for comparisons?
When we enter a property on our listing as closed we are supposed to also put any concessions that were given, so when using as a comp we can give more accurate value. In other words if you have the exact same house as your neighbor and it sold for 300K, but they gave a 10,000 concession as a "decorating allowance", then your Realtor will/should tell you the house actually sold for 290K, so compare it as that. A lot of Realtors don't enter that in the MLS and it throws things off. To answer your question for new construction....a lot of builders will give you incentives on better countertops or upgrades in fixtures and appliances which may equal 20k rather than lower the price, but you won't see that entered on MLS. The builder would rather give incentives than have the house recorded downtown sold at a lower price so the next buyer sees that and wants to pay the same. Nothing wrong with that as a buyer because you are getting "more", but it's not costing the builder the face value.
Yes, all of the above caveats on average price having any meaning, plus this - it's entirely possible that on average smaller, less expensive houses are the ones that sold that particular month. Could be some reason for it - first time buyers with no kids are more likely to buy during the school season (I'm just making this up, but you get the idea). Could be that there's no reason for it at all, and it's just dumb luck that month. But the point to remember is that there's no way to make sure that the average home sold this month is the same as the average one sold last month or last year, so comparing the average prices on these changing "average" homes is an inexact science at best.
If the number continues to trend down for 3-4 months, then it starts to be meaningful. My guess is that it'll bounce around in a more or less random way, just like it has for the past few years, and we'll need some sort of moving average to see anything interesting.
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