Once we get past the Super Bowl, home buyers will be out in force, resuming their hunt for a new home and hungry for a deal.
Boy, are they going to be surprised.
Not only is the active inventory as tight as ever, the new listings are dribbling out, compared to previous years. Here are the number of new listings that hit the MLS between Jan. 1-9, and their average LP/sf:
There were 15% fewer listings this year, compared to 2012.
But look at the average list prices – the $569/sf is 42% higher than the 4Q12 average sales-price-per-sf ($400/sf). The average list price is similar to 3-4 years ago, back when sellers thought they deserved higher prices due to the homebuyer tax credit.
This is how the Big Standoff begins.
Historically the first quarter hasn’t been a time for big price increases, but admittedly, this is the new abnormal so it’s possible that buyers are willing to step it up. Here is the track record of the average $/sf of NSDCC detached-homes sold in the fourth quarter, compared to the following first quarter of the next year:
|Avg 4Q $/sf
|Avg 1Q $/sf
The first quarter usually comes out a little sluggish on pricing – each of the last four years has seen a lower 1Q average than the previous fourth quarter. We could break that streak, but by how much? $410/sf? $425/sf? Look how that compares with the average list prices!
With so many sellers shooting for the moon, the few who price their home realistically will be getting more attention than ever. We will be hearing more crazy bidding-war stories, and it will be because there are so few sellers who are listing for reasonable prices.
it’s not the end of the world. It just means that we can expect 2013 to be like 2012, where the first half of the year saw relatively slower sales due to buyer patience, and an active second half of the year once sellers get more realistic.
The inventory numbers will stay low by historical standards, but the unsold listings should start growing over the next couple of months. Let’s start tracking them – today there are 649 active (unsold) listings of detached-homes in NSDCC. Their average LP is $722/sf – so at least this year’s new listings are under that!
P.S. We won our first bidding war of 2013!