A Little Bit Slower – October Market Statistics

Based on the limited data available so far in the fourth quarter, the torrid pace set in the first three quarters appears to be slowing. October’s closings were down 3% and pending sales down 4% from October 2012.

Several things are happening to create this slowdown:

(1) The institutional investors are pretty much gone from the market, decreasing the demand for residential income property. (2) Although interest rates remain at very affordable levels, they have risen approximately 1.5% this year, eroding buying power by about 15%. (3) The inventory of distressed property has decreased significantly. Only 6% of listings and 9% of sales were distressed properties in October. (4) Average prices have risen 17% in the last year, again decreasing the affordability of owning a home.

However, there are many signs our market will continue to be healthy for the next year. (1) Although average prices have risen, the average price of a home now is still 20% lower than six years ago when the market turned down. (2) Even though interest rates have increased recently, they are still near all-time lows, making real estate ownership look like a great, affordable deal. (3) While inventory levels have risen by 50% over the low point this year, we still have only 3.7 months of residential property on the market. (4) Ada County is creating jobs. And finally (5) we have found that, as California prices rise, Californians are able to sell their homes and come to Idaho.

Buyers: Prices are still competitive and interest rates are still low. Fall is often a more relaxed time to buy before the expected surge next spring. The main obstacle you may have to deal with is finding just the right property because of limited availability. It’s a good idea to have a trusted relationship with an agent who can get in touch with you right away when they find something new has come on the market.

Sellers: The good news is that, with inventories still lean, you are in a position to have success. Buyers who are in the market now are generally quite serious. Bringing your property onto the market now may enable you to beat the more competitive market in the spring.

Be sure to stay in touch so I can keep you updated on market conditions.

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How’s the market?

I guess you could ask 100 Realtors this question and get 100 different answers. Even agents in the same geographic area will have varying responses. Here’s what I think based on what I have been experiencing.
In the Treasure Valley, the market is improving.  That is not to say that we don’t have our fair share of distressed properties. We do. It also doesn’t mean that home prices are soaring, but in some areas prices appear to be stabilizing and even rising slightly. The market is interesting to say the least.  According to January numbers from the Intermountain MLS for the last three years, the percentage of Active Properties (listed for sale) vs. Pending Properties (under contract and waiting to close) has significantly improved.  Also, notice that the inventory is very low. This means that quality homes that are priced right are selling more quickly.
New Construction Numbers:
Active          Pending
01/2010     1582             200           13% pending
01/2011     1298              145            11% pending
01/2012     1014             198             20% pending
Existing Home Numbers:
Active            Pending
01/2010      8362              1285          15%  pending
01/2011       7228              1190          16%  pending
01/2012      4885               1470         30% pending
The biggest complaint I hear from agents these days is about lack of inventory.  The buyers are out there, and why not? Prices are good and interest rates low.  The problem is that there isn’t much to buy.  Well qualified buyers are waiting for “the house” to come on the market. It seems sellers are holding tight. Perhaps they think that prices will increase, or maybe they are just afraid to find out what their home is worth.
As a Realtor, all I can do is spread the word that buyers are waiting – perhaps for your home! It would be nice if we could get sellers back into the game.
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