If you look at the numbers for the first half of 2013, you might conclude that most people who sold their Fair Haven homes were smiling. Although the same number of homes sold, average listing prices were up 18%, average selling prices were up 19%, and there were 21% fewer homes on the market. In addition, sellers got closing prices closer to listing prices than in the same 6-month period last year.
The decrease in the number of Fair Haven homes on the market also decreased the all-important real estate absorption rate. If you’ve been following my posts you know that this is a calculated number which estimates how long it would take to sell all the homes currently on the market, assuming that homes continue to sell at the rate they have in the past 12 months. A 5 -7 month absorption rate is considered a “normal market”, greater than 7 months is considered a “buyer’s market”, and less than 5 months is considered a “seller’s market”. For the past 4 months the Fair Haven absorption rate has been in a “seller’s market”.
The only anomaly is the median sales price, which is 4% lower than it was a year ago. The median is the price at which 50% of the homes sold at a higher price and 50% at a lower price. I usually prefer to look at the median (and not the average) price because it’s less influenced by “outliers”. So should Fair Haven home sellers be smiling or not?
To answer that question, here’s another question: what does it mean when the arithmetic average price is up but the median is down? In this case it means that more high-end homes sold this year than in 2012. In the first half of this year, 7 Fair Haven homes sold for more than $1,000,000 including two (2) that sold for over $3,000,000. By June 30th last year, only 4 homes had sold for more than $1,000,000 and the highest home sale was a relatively low $1,300,000.
The take-home message: yes, most Fair Haven home sellers had reasons to smile. Homes sold faster this year (the average cumulative days on market was 98, compared to 123 a year ago), and buyers had fewer homes to choose from.
Don’t be mislead by someone telling you that the average sales price was up 19% so your home is worth 19% more than it was a year ago. The Fair Haven real estate market is NOT up 19%, because the median price is saying that the market is either down a little or flat. However, the median price was down 6.7% at the end of May and it’s only down 3.5% now. In a month or two it may be higher than it was a year ago, and that’s when Fair Haven home sellers can really smile.
Here are all of the numbers:
|Fair Haven Home Sales, January 1 – June 30|
|Sales (Demand)||38||38||Same number of sales.|
|Listings (Supply)||43||34||21% fewer listings.|
|Months’ Supply (Absorption Rate)||7.2||4.1||Demand vs Supply much stronger.|
|Based on the past 12 months|
|Average Sale $ (Value)||$690,268||$817,914||19% higher average sales price.|
|Median Sale $ (Value)||$635,000||$612,500||4% lower median sales price.|
|Average Listing $||$720,057||$847,428||18% higher listing price.|
|Avg Sale/List %||95.9%||96.5%||Higher Sale/List %.|
|Avg Cumulative Days On Market||123||98||Fewer CDOM|
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