As 2011 is wrapping up, here’s how the NSDCC detached sales and average cost-per-sf compares with previous years (I added a zero to the $/sf numbers):
We have seen that the size of the inventory has some sort of impact on the market. When the market is loaded with over-priced turkeys (OPTs), buyers gain confidence about staying on the fence. When it grows thin, the buyers get antsy and jump sooner…and some at prices a little higher than they want.
The size of inventory is fluid, and day-to-day. But for our purposes, we can see an overall effect below by comparing annual sales to total listings taken each year:
|NSDCC Det.||Annual Sales||Total Listings||AS/TL|
By dividing sales by listings, we have the efficiency ratio, and when it’s around 60% the market seems to be somewhat balanced. You can see that in 2001 that we lost about a month’s worth of sales due to 9/11, and that in 2003 the market was in full-tilt-frenzy mode.
Today’s low rates and below-peak pricing, combined with the tight inventories, are helping to improve the efficiency rate.
The average days-on-market hasn’t been this high around NSDCC in a decade, which generally means that the sellers’ motivation is dreadfully low. The banks aren’t pushing people to short-sell or foreclose unless their delinquency is extremely high, and elective sellers are willing to wait for the lucky sale.
These market conditions do help put a brighter spotlight on the few well-priced listings, and as a result, we have vicious bidding wars and shenanigans to contend with, in the fight to win one.
The thin inventory and lower seller motivation is a tough combination for buyers – get good help!