Overview: Listings Shortage Produces Slowing Sales And Rising Prices
Since 2015 we’ve been saying: one factor that could halt the region’s month-after-month sales records is a shortage of listings. In February we saw signs that this might finally be happening.
February’s unit sales of 174 were down 4% from last February, just the third – and biggest – year-over-year drop since March, 2014. New listings and expired listings were also down 12% and 59% respectively from a year ago. And yet, February’s record-breaking volume sales of $75,302,201 were up 11% from last February’s record, thanks to a 16% average price increase and a very overheated market with multiple and overprice offers a plenty.
Turning now to year-to-date sales, this year’s 285 units are down 1 from 2016, while volume of $129,600,030 is up 23%. The sales came on 22% fewer listings and 52% fewer expireds. With such huge buyer demand, 2017’s average sale price of $454,737 is up 23% from a year ago.
All in all, 2017’s record sales volume, big average price increase and high 70% sales/listings ratio all indicate that the demand for listings greatly exceeds the supply. There is no question that sales would be much higher if there were more homes on the market
The Market In Detail
As Table 1 and Graph 3 show (see below), 2017’s YTD unit sales and average sale price numbers translate fairly predictably into all the market metrics for different price ranges.
While unit sales are down 17% in the high-volume $100K-$499K price range, they are way up in all other ranges. The $500K-$799K range is up 52% from this time last year. And the entire $800K+ luxury home segment is up 93%, with huge gains of 71%, 86% and 300% in the $800K- $999K, $1M-$1.999M and $2M+ ranges respectively. Even sales in the under $100K price range – which have generally decreased with each passing year due to fewer and fewer homes being listed at that price – are currently up 27% from one year ago.
As the year progresses it will be interesting to see how much the increasing demand for high- end homes throughout the region impacts overall volume sales and prices generally.
In Graphs 4 and 5 we see that while February’s record-breaking dollar sales were up 11% from last February’s previous record, unit sales were down 4%, largely due to 12% fewer new listings on the market. It will be interesting to see if this trend continues throughout 2017.
Sales By Property Type
Single-Family Homes:
YTD dollar sales of $99,594,511 are up 18% from a year ago, while unit sales of 181 are down 13%. The average sale price of $550,246 is up 33%.
Condominiums:
YTD dollar sales of $21,455,521 are up 30% from a year ago, while unit sales of 64 are up 5%. The average sale price of $335,243 is up 24%.
Vacant Land:
YTD dollar sales of $9,571,915 are up 108% from a year ago, while unit sales of 44 are up 76%. The average sale price of $217,544 is up 69%.
The Takeaway
February was the Georgian Triangle’s 35th consecutive record month for dollar sales. And yet, unlike 32 of those months, that record was not primarily due to record unit sales – which were actually down 4% in February, the biggest year-over-year drop since March, 2014. Instead, February’s monthly record volume sales were due to a 23% increase in the average sales price produced by huge buyer demand on account of a big shortage of homes for sale.
After watching, since 2015, each month’s new listing and expired listing counts drop while unit sales kept increasing, have we finally reached the point where there are too few homes on the market to sustain the record pace? The prospect of our regional market slowing again – not due to a glut of listings and relatively weak demand such as we saw from 2008-2013, but rather to an over-demand for listings that can’t be fulfilled – is indeed an interesting one.
One thing is certain. Partly due to the prevailing demographics, increasing numbers of buyers are discovering what an incredible place the Georgian Triangle is to both live in and get away to. All the multiple and overprice offers we’re seeing are surely testimony to that. So if you’ve considered selling, your chances of getting a great price in a timely manner are excellent.
