Falling inventories generating higher prices.

Fannie Mae is predicting that falling housing inventories nation wide are likely to contribute to a 5.1% increase in selling prices in 2013. Summit County is certainly participating in that inventory decline with listings down 12.5% from the same time a year ago. High-end prices have already started to rise and if current trends continue the rest of the market is sure to follow.

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First quarter off to bang-up start

The real estate market in Summit County is getting off to a far stronger start than in 2012. Last years first quarter saw an 8% decline in transactions and 5% decline in dollar volumes. In contrast, this year’s first quarter has seen a 24% increase in transactions to 318 and a 17% increase in dollar sales to $140.8 million. March was a very strong contributor to those gains with transaction volume increasing 46% to 118 sales, the highest March number since 2008. As can be seen in the chart below, this was the sixth month in a row of rising sales volumes and the 11th month out of the last twelve that showed a gain. Interestingly, those gains were made without a single sale over the $1 million mark in March. The prior two months had seen 16 sales over the million dollar mark. Nevertheless, dollar volume was still able to post a 25% increase over the prior year and showed the highest dollar volume for a March month since 2008. With the dearth of million dollar sales, year to date average selling prices for single family homes dropped sharply from the $878,488 of the prior two months to $758,718 or just below the average for all of last year. Average selling prices for multi-family units fell slightly to $306,006 but are running about 13% below all of last year. Average lot prices did again show some improvement and year to date the average price now stands at $322,956 versus an average of $309,512 for all of 2012. Lot volumes were up from March 2012 at 13 versus 8 but volumes are still running at less than a third of those seen at the peak of the market. Foreclosure activity showed an improving picture. While actual foreclosure volume rose from 7 to 12. Notices of Elections & Demand (the start of the foreclosure process) dropped dramatically from 59 to 10.

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Sales volume continues to rise in Summit County

Summit County real estate transaction volume showed another double digit increase in February rising 16% to 92 transactions.  That follows a 13% gain in January and a 12% increase for all of 2012.

Dollar volume did not fare as well as sales shifted to lower priced properties.  Dollar sales totaled $40.7 million down 6% from $43.1 million in February of 2012.  As has typically been the case over the last 10 years, both volume and dollars took a seasonal dip versus January falling 15% and 24% respectively.

Average selling prices for single family homes at $878,488 is still running well ahead of the $764,455 for all of last year.  In contrast, multi-family pricing is well down at $309,637 vs $353,339 in 2012.  It is a little early in the year to decipher a definitive in trend and the variations so far seem to reflect more a change in mix than actually a substantial change in pricing for like properties.  Our sense is that per square foot pricing is rising at the high end of the market ($1 million and up) while the lower end (under $600,000) is flat at best.

Overall, volume does remain concentrated in the lower end of the market.  In the month, 76.6% of sales, both single and multifamily, were less than $600,000.  That number was 77.1% for the year to date versus 72% for the year to date number a year ago.

Notably, inventory continues to show substantial year over year declines.  As of March 1, inventory was down a little over 10% from the prior year, which itself had seen 12% from 2011.  If volumes continue to rise and inventories fall, stronger prices are sure to follow.  Lower distressed property activity should also contribute to a firmer market.

 

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January sales off to a strong start

Although showing its typical seasonal dip, Summit County real estate sales continued to show strong year over year gains.  Transaction volume dropped from 185 sales in December to 108 in January but that still reflected a 13% improvement over a year ago.  Dollar volume fell to $53.4 million from $87.2 million in December but that still reflected an impressive 33% increase from January of 2012.

Sales in the low end of the market were quite robust with 35 transactions or 39% of the total volume made at less than $300,000.  For all of 2012, sales of properties under $300,000 were only 32% of total volume.

Interestingly, the high end of the market was also strong.  There were ten sales over $1 million including one in excess of $4 million.  That is only one less sale than in December even though overall sales were down 42%.

Aided by a $4.2 million sale, the average selling price of a single family home rose to $974,971.  Even without that sale, single family ASPs rose to $867,470 versus $764,455 for all of last year.

Land prices also were able to post an increase in average selling prices rising to $342,825 versus $309,512 for the prior 12 months.

Multi-family ASPs continued to decline, hitting $311,640 versus $358,339 for 2012.  That drop is likely more reflective of a higher volume of  purchases at the lower end of the market than it is of actual price declines in the market.

Distressed property activity was flat with eight NEDs (vs six a year ago) and five foreclosures versus six in January of 2012.

 

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Check out our newest tutorial – Home Inspections

Are you a new home buyer and have questions about a home inspection.  Are you a seller wondering if you should have an inspection before you list?  These questions and many more can be answered in this video where Eric Buck, associate broker RE/MAX Properties of the Summit interviews Joni Ellis and Pat Wathen of Independent Property Inspections about the home inspection process.  See the video here: http://www.ownthesummit.com/real-estate-tutorials/ by clicking on the “Home Inspections” thumbnail.

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Summit County Sales Close Year on High Note

Summit County saw a bang up December allowing the  full year to end with solid gains.  For the month, dollar sales rose 42 percent to $87.2 million while sales volume increased to 185 transactions.  Those numbers represent the third highest dollar volume and second highest transaction volume for the year.  The strong results allowed the full year to record a 13 percent increase in dollar volume to $772.9 million, while the 1,624 transactions represented a 12% increase over the prior year.  That full year performance is particularly impressive given that at mid year, transactions were up only 3 percent and dollar volume was actually down 7 percent.

 

News was a little more mixed on the pricing front.  While the average selling price of a single family home rose 4% in the year, the average price of a multi-family unit fell a similar amount.  However, in 2011 multi-family pricing dropped 14% so it would appear we are nearing bottom in multi-family as well.  The more volatile vacant land market showed a 25% increase.

 

Looking at sale price points, the increase in unit volume slightly favored the mid tier of the market.  Sales under $600,000 represented 73.6 percent of the volume versus 74 percent last year.  Sales between $600,000 and $1 million were 18.3 percent versus 17.2 percent and sales over $1,000,000 were 8.1 percent  of the total versus  8.6.  There also was good news for the distressed market.  Newly initiated foreclosure proceedings dropped by 23 percent and properties actually lost at a foreclosure auction were down 27% to 165.

 

Rising volumes, falling inventories and declining volume of foreclosed properties certainly bodes well for property values looking forward.

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October Real Estate Sales Post Blowout Month

October produced the strongest performance in Summit County  of any month in the last 4-5 years.  Transaction volume vaulted to 230 units up 43% from a year ago and 45% from September.  That was the highest unit sales number of any month since December of 2007.  Dollar volume produced a similar jump rising 54% from a year ago to $104,7 million.  That compares with $88.1 million in September and is the highest dollar volume since October of 2008.  The numbers were helped by the simultaneous closing of 12 new units in the Frisco Town Sub totally just short of $6 million, but even excluding those sales the numbers were quite impressive.

While there was some activity at the high end of the market with 14 sales over $1 million, including one at $3.1 million, activity was most robust in the lowest pricing brackets.  Sales under $200,000 account for 16.9% of all transactions compared to only  10.1% of transactions in the prior 8 months and sales between $200,000 and $300,000 were 21.7% of the total versus 15.9% in the earlier months of the year.

Despite the high volumes at lower prices, the average selling price for a single family home year-to-date actually rose from September‘s $758,340 to $765,769.  This suggest that the volume shifted more to multi-family sales rather than single family homes – perhaps due to skiers lining up their ski condos for the winter.  The average selling price of a multi-family unit did dip from $360,718 to $352,392.   Year-to-date, the average selling price of a single family home is up a little over 4% from year end 2011 while the average price of a multi-family unit is down about 4%.

 

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Higher end of the Summit market gets active

Transactions volumes ticked down slightly in September but a pick up at the higher end of the market generated the strongest monthly dollar sales since December of 2009.  There were a total of 158 transactions in the month down from 159 in August and 162 a year ago.  Total dollar volume, however, jumped 10% year over year to $88.1 million.  August had been highest month year to date at $66.8 million.  The higher dollar volume was generated by a decided improvement in the higher end of the market.  September matched August with 11 sales in the $1.0 to $1.5 million range but added 8 sales over $1.5 million (versus none in August) including one sale at $5.57 million.  That was twice as many sales over $1.5 million than had occurred in the first 8 months of the year.  For September 15.3 percent of the transactions were over $1 million versus only 7.8 percent for the year through August.

After a slow start, the year to date is up 4 percent in transactions and 5 percent in dollars.  The improvement in the high end moved the average selling price of a single family home to $758,340 so far this year versus $734,262 for all of 2011.  Mutli family pricing has been relatively stable through the year holding at $360,718 down modestly from $367,280 for all of last year.  The year to date average sales price for land jumped to $314,185 from $281,388 in August aided by the sale of a 23 acre plot in Western Sky Ranch.

Bank and foreclosure activity remains relatively light.  Ten properties (excluding timeshares) went to public auction in September and in each case, the properties went back to the lender.  Two bank own properties were sold to the public.

 

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Summit County volumes remain up but dollars lag

Sales activity in June rose for the third straight month, albeit at a more modest pace than was seen in April and May.  Total transactions were up 5% year over year to 109 but that pace was below the 134 and 113 transactions recorded in May and April respectively and trailed the 25% and 7% gains recorded in those two months.  Dollar volume did not fair as well falling 21% from a year ago and 24% from the level of June to $52.1 million.  Year to date transaction volume is up 3% while dollar volume is down 7%.  While the number of transactions had a slow start in the first three months, the strength of the last 3 months has put year to date transactions (for June)  at their highest level since 2008.

The average sales price for a single family home is down about 10% versus the year to date number last year, but is off less than 3% from year end.  Multi family pricing is down 8% versus the year ago number and about flat with the average for all of last year.  One interesting note is that higher end properties, while having less sales, seem to be holding prices better.  For example, so far this year, the eight sales in the Highlands neighborhood are barely half of last years 15 sales, but the average price per square foot is up six percent.  Conversely, the Blue River area where the typical home sells for 1/3 the value of the highlands, sales volume is up 30% but the average price per square foot is down 10%. It is obvious that the mix of sales (low end vs high  end) is as if not more responsible for the drop in overall average selling prices.  It is notable, however, that June did see the first transaction over 2.5 million this year.  In fact, there were  two.

 

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Beware of listing aggregators

Listing aggregators such as Zillow, Trulia and Realtor.com have become popular sites for buyers to search for properties.  However, these aggregators have become notorious for having inaccurate out-dated and misleading information.  A recent search of one aggregator showed twice as many listings as were actually active in Summit County.  Your best bet for accurate, up-to-date information is your Realtor or their IDX fed website.  Try mine at www. OwnTheSummit.com.

 

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