It’s incredible to see how far we have come.
While there are still plenty of buyers waiting for more inventory/lower prices/lower rates, this month’s sales and pricing combination will rival those at the previous peak.
Let’s estimate this month’s sales and pricing.
Over the last three days of June, 2012, we closed 70 sales.
If we add that 70, plus 10% of total for late-reporters to the current total of 244 closings this month, it equals 345 estimated sales. It is typical that the cost-per-sf stays about the same, so if we wind up around 345 and $459/sf, we be similar to 2004 when the market had been scorching:
June Sales and Average Pricing, NSDCC Detached-Homes
| Year | |||
| 2002 | |||
| 2003 | |||
| 2004 | |||
| 2005 | |||
| 2006 | |||
| 2007 | |||
| 2008 | |||
| 2009 | |||
| 2010 | |||
| 2011 | |||
| 2012 | |||
| 2013 |
To close roughly the same number of sales while the average pricing went up 25% since last June is remarkable – and similar to the last peak era when the no-doc neg-am loans were the rage and average pricing jumped +37% from June 2003 to June 2004.
In the coming years, will we see a similar trajectory as last time, or will the environment of low-fixed-rate loans and low inventory keep it steady?
So will be interesting to see if the recent rise in rates has any effect, Mortgage app’s seem to have fallen quite a bit.
My guess is there will be less bidding wars and more list price offers accepted.
Good guess.
Buyers will feel less pressure to offer list price or higher, but it will still take that much to satisfy some sellers.
But we could have the ‘demand’ drop in half and not notice it statistically because you only need one buyer per sale. If there are fewer bidding wars but sales keep cooking, sellers will have the luxury of riding the wave, no matter how thin it might be.
Both buyers and sellers should thoroughly examine the market conditions when pricing.