The Cromford Report™ Monthly Market Review Brought to you by:
The Kennedy Group is pleased to provide this Mid-Month Market Report. The latest real estate trends and statistics are delivered each month in our Market Report as a complimentary service. Our business is built around the concept of educating and providing the personal service that our clients have come to depend upon. It is with this philosophy that we offer select data from the Cromford Report to our clients, associates and friends. It is intended to keep you informed on critical market trends that affect the Real Estate profession.
Overview The Pending Home Sales Index rebounded dramatically in May, suggesting an increase in housing activity in the coming months. The index in May increased 8.2% from the previous month – the largest one-month gain in the index since this past November. This is the first time since April 2010 that the pending home sales index has recorded a year-over-year increase. As of July 8th, the MBA’s seasonally-adjusted purchase index is up 12.61% compared to the same time last year. This is the highest year-over-year gain in any week for the purchase index since September 2007. Meanwhile, national average mortgage rates continue to inch upwards. Although still near historic lows, rates have recorded increases for two consecutive weeks and have not recorded a decline in the past four weeks. SALES Month over Month Sales in June took a 13.4% surge to 11,125. This completes the second quarter’s upward trend. The continued increase in sales is good news. SALES Year over Year June sales were 19.9% higher than June of 2010. More impressive is the 11,125 sales in June represent the highest sales figure of the decade, even surpassing the two highest sales figures in the 2005 boom of 10,252 and 10,031, in June and August of 2005, respectively.
New Inventory New Inventory dropped again for the third month in a row, albeit by only .5%, adding 10,410 new listings to the total inventory pool. June’s figure is a 15.4% decline over June 2010. Slowing of the new inventory flow into the market affects the total inventory and is seen as a positive and necessary recovery metric.
Total Inventory With the exception of a small 1% increase in January, the total inventory trend line has been declining since December. June’s 29,203 figure is the first time that the total inven-tory figure has dropped below 30,000 since STAT began tracking this metric in June 2008. Reduction in total inventory directly affects the market balance. Declines in inventory weigh in Sellers’ favor and can positively influence pricing.
Months Supply Of Inventory (Msi) Months supply of inventory (MSI) declined from May’s 3.23 months to 2.62 months in June, representing a 18.9% decline, and following a steady downward trend started in January. MSIs below 4 are typically seen as Sellers markets and exert upward pricing pressure. Market wide MSI is a barometer of overall market health. MSIs in smaller niche markets will have their own unique MSI and which could or could not follow the MSI trend for the entire market.
New List Prices Median and average new list prices both declined in June to $120,100 and $190,400 re-spectively. The Valley pricing trend appears to have flatlined, with little indication of immi-nent recovery. The 2% decline in median list price coupled with 2.6% decline in the aver-age are clearly disappointing given other metrics showing signs of rebound.
Sales Prices Both the median and average sales prices ticked up slightly to $110,500 and $160,000, respectively. The median sales price has fluctuated between a narrow $2,700 spread since January, with the average sales price fluctuating an anemic $5,700. Similar to new list pricing, the trend lines for both median and average sales price have remained flat since December.
The ARMLS Pending Price Index™ The ARMLS Pending Price Index is a predictive tool unique to ARMLS which uses pending sales data in the system to forecast median and average sales prices 90 days into the fu-ture. The accuracy of the predictions diminishes the further into the future it goes. Last month’s PPI predicted an average sales price for June of $161,400, missing the mark by -.87%, to actually land at $160,000 in June. The median sales price for June missed last month’s predicted $114,000 by 3.07% to come in at $110,500. The average sales price forecast for the next three months dips to $158,000 in July, fol-lowed by further drops to $143,000 and $141,000 in August and September. The median sales price prediction follows a similar pattern with an increase to $112,000 in July, fol-lowed by a drop to $102,000 in August and $100,000 in September. Unfortunately, the PPI forecasts very little pricing recovery over the next ninety days.
PPI Supplement The PPI Supplement spotlights the number of pending contracts added to the MLS system in the current month. Data represents the average and median pending sales prices as well as units and their percentage of the total pending units for June in each specific price range. Data is graphically presented in four month increments so that the reader is alerted to changes in the behav-ior of properties in given price ranges over time. June pendings in the $50,000-$100,000 price range show an upward tick from April to June. Metrics for properties above $500,000 are delivered in chart format only. As the market recovers we should observe an increasing percentage of pendings in the higher ranges. Over time such sales will eventually move the actual median and average sales prices to higher levels.
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