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The Good, the Bad and the 3rd Quarter
Crystal Coast Real Estate News
By: Bill Hitchcock
The Crystal Coast real estate market has become, shall we say, “Vey Interesting!” Although the over-all market is still glutted with inventory-Signs are showing that the causes of the glut are now dissipating.
Inventory
So far this quarter 7 out of every 100 homes listed have been sold. Last year it was 8 out of 100. The 3rd quarter of 2006 saw 10 homes sold out of 100 listed. And in the banner year of 2005, for every 100 homes listed a whopping 30 got sold.
The amount of inventory currently available on the market is at a 21 month supply. What that means is that if no new homes came on the market for sale it would take 21 months to sell off the homes that are currently on the market.
Have you ever wondered why a listing agreement is usually for 6 months? In a normal, stable market it takes about 6 months to sell off all of the supply of inventory in that market. The Crystal Coast MLS area is approaching 4 times the normal rate of sales.
More Inventory
We have a lot of inventory that is just sitting on the market. Although YTD figures show that we have a total of 2% less inventory on the market in 2008 compared to last year, 46% of those homes have been on the market since 2007 or earlier!
The good news is that the rate of new inventory coming on the market is down by 18%-A total of 1976 new listings have come on the market this year. The bad news is that sales are off by 17% with only 785 properties sold this year. Statistically speaking, when one home gets sold-two and half new homes comes on the market to replace it.
A very important factor that has played a key role in reducing the over-all inventory has been cancellations. The Crystal Coast MLS area has had almost the same number of listings cancelled and taken off the market has it has sold.
Price
Almost a third of all homes purchased this quarter fall within the $200K thru $299K price range, with most of those purchases falling beneath $249K. The YTD average sold price is at $258K.
Although the YTD average sold price for a Crystal Coast home is down by 4% in comparison to 2007, the third quarter prices in some towns have made big re-adjustments to get in-line with that price range.
Morehead City for example whose annual average sold price is at $338K, has had sold prices re-adjusted to $285K during 3rd quarter. Beaufort currently has an average sold price at $191K compared with its annual price at $269K. Sales in these two towns are down by 12 and 28 percent respectively.
Cheer up! It’s not all gloom and doom!! Newport sales are up 15% as well as the average sold price. Emerald isle has had a tremendous 3rd quarter sales growth (Up 62% compared to the same time period last year) all the while maintaining the same price point from a year ago ($563K).
Swansboro is another area I’ve been talking about for quite some time now. Although their recent sales price has fallen beneath the annual average (Currently $209K compared to $252K) the number of sales in Swansboro have shot up by 30%.
What sells
Here’s a little insider info-The newer listings are selling faster. That’s right-The homes that have either come on the market in 2008 or have been re-priced to align with 2008 pricing are the ones selling. Homes that were priced in 2007 (or earlier) and have not made allowances for the current conditions are the ones sitting……….and sitting………………and…..well, you get the picture.
The average days on market for an unsold home are 227 days. The average list price is $456K.
The average list price for a sold home is $274K with the average sold price at $256K. The average days on market for a sold property are 194 days.
Cost Not Value
I must add that the reason why the bulk of the sales are within a certain price range is because that’s the price range most consumers can afford. Don’t get me wrong-If you have a multi-million dollar home or a $150K home-I am not suggesting re-pricing. But in the current market conditions the homes that can price within that range are the ones being sold the quickest. This should shed light on those who have a great home, been on the market for a while-Have reduced the price below its value and still can’t sell their property.
There is also a direct correlation between time and money. The higher the cost, the longer the time for it to sell. Conversely-The lower the cost, the shorter the time to sell.
Don’t confuse value and price. A million dollar home priced at $800K is a tremendous value, but due to the high cost-Just may be sitting on the market for a while simply because it is priced out of the range of the consumer.
It’s a complicated market. And it’s my belief that the complexity is due to the market place righting itself. Understanding this complexity is paramount in surviving what has been one of the greatest real estate roller coaster rides of all times.
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