Can we get a sense of the early-2014 market by how this year is winding up?
We thought mortgage rates dipping back into the 3%-range again would be a boost, and it looked like we were headed that way. Two weeks ago, the 30-year fixed rate was 4.10%.
Today’s 30-year fixed rate? 4.42%.
Sales are a precursor to the direction of prices. The second half of 2012 was spectacular, with both the NSDCC sales and average pricing skyrocketing – and the frenzy was on.
Statistically, the frenzy conditions have carried through the third quarter of 2013, but it looks like we’re going to experience some drop off, at least in the sales counts:
We are off to a good start this quarter, though currently 16% below the sales closed in the same period last year (we will still have late-reporters).
If we close the same amount of sales between today and 12/31/13 as we did in the same period last year, the 4Q13 total will only be 769, which would be an 8% decline. It’s not that suprising that sales could falter, with the Y-O-Y average pricing up 25% and a huge bump lately.
Will 4th quarter sales this year be able to match last year?
We will need 511 more closings by 12/31/13 to tie last year’s 4Q sales count.
Current pendings: 308
Current contingents: 55
Number that went pending after 11/12/12 and closed by 12/31/12: 154
Of the 308 pendings, 119 of them are still in their 17-day inspection period. If 25% of them fail, ten percent of the remaining pendings drag into 2014 before closing, and half of the contingents fail to close by year-end, then we will close around 430 sales the rest of the 4th quarter.
321 + 430 = 751 closings in 4Q13, or roughly 10% less than 4Q12.
No one is going to mind that small of a dip in sales, especially those who compare to any previous year besides 2012. We should sail into 2014 in relatively good shape.
Yesterday we saw that the current inventory is in a slight seasonal decline. What could screw up a boisterous Spring-2014 selling season? If the inventory spikes higher with OPTs, or we run out of buyers who are willing to pay $500/sf. We will see!
I will break down the sales and $/sf by zip code later.