We have a lot of interesting trends to report this month.
First, our streak of 24 consecutive double digit
increases for condos and townhomes may be in jeopardy. We had 902 closings
in June or an increase of only
2.0% over the same year ago period. We may have a double -digit increase
after lagged closings are reported,
but it will be close.
Detached single family had 6,253 closings in June or a
decrease of 3.0% from June 2004. After lags are
reported, we will be positive, but only with a modest gain.
The reason for a slight slowdown is that our prices are
starting to rise. Not huge increases, but enough to
slow down a robust housing market.
For the first time this year condos and townhomes had an
increase in the average sale price over the same
year ago period. Not only was the average price of $196,682 the largest
year-to-year increase since January
2004, but it was an all-time high, breaking May 2004’s $195,319. It will be
very interesting to see if this is a
one-time occurrence or a continuing trend.
The biggest change of all was for single family detached, as
the average sale price in June was $268,117,
easily breaking the all-time high from April by $12,000! The average price
for all single family was
$259,112 or $14,000 higher than the previous record, also reported in April.
Are these price increases really
a surprise? Not really, as with strong demand we will always have pressure
on prices to rise.
We are also really seeing large increases in raw land and
lot prices. Builders who are “sitting” on lot
purchases or positions from a year or two ago are at a huge advantage over a
builder who is out of lot
inventory and is buying lots right now at a premium. If the consumer keeps
buying the higher priced new
homes, then resales will continue to have large price increases too and we
will continue to have a sellers
market.
For the sixth consecutive month, expired listings for
detached single -family have been below the same year
ago period in 2004. However, condos and townhomes had an increase in expired
listings over 2004 and now
for the 5th month out of 6 in 2005 we have had an increase.
The average days on market for condos and townhomes dropped
to 80 in June. This is the lowest monthly
average since we had 77.8 in October 2003 and 10 days below the same year
ago period. This also the first
time this year we have been below the same year ago period for DOM and this
is in direct correlation to our
first price increase for the year as mentioned above.
Single family prices increased 7.1% in June. If price
increases continue to be at or above 7% for any length
of time you can expect interest rates to move upward fairly quick. We need
appreciation to be averaging 2-
4% for interest rates to remain at the low levels we have enjoyed the past
few years.
Thank you,
Steve Palm
Smart Numbers
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© 2005 Smart Numbers
