Sales Down, Prices Up; But Beware

By Steve Palm
Smart Numbers

There were 6,070 closings for all single family in March. This is a decline of 16.7% from March 2006, but only a decline of 5% from March 2005. March 2006 was a strong closing month and after lags are reported we should still be ahead of March 2005.

Single family detached was down 16.7%, while condos and townhomes were down 16.8%. Condos and townhomes had 963 closings versus 5,107 for single family detached. As can be seen from this latest period, condos and townhomes are becoming a large part of our housing market, as almost 16% or 1/6th of all closings are now a condo or a townhome.

The average sale price for all single-family closings in March was $256,336 or an increase of 4.8% from the same year ago period. When housing is down, prices usually remain “flat” or even decline. However, the 4.8% increase is the largest percentage increase since December 2005.

Single family detached had an average price of $268,799 or a 6.1% increase over March 2006. Condos and townhomes had an average price of $190,243 or a decline of 4%. The trends for average sale prices for condos & townhomes and single family detached show how these two housing categories have differed over the past 5 years. Condos and townhomes have not changed much, while single family detached has experienced moderate sustained growth in prices.

There are almost 30% more total single-family active listings on the market at the end of March compared to March 2006. However, there is double the amount of active single family listings than there were 5 years ago. With demand being flat and active listings on the rise, prices should come under pressure during the spring and summer.

The months-supply of single family detached hit another all-time high with almost 8 months supply on the market at the end of March. If you are a buyer you will have a lot of homes and many buying opportunities this spring. However, if you are a seller I would recommend reviewing the property absorption numbers to help you understand what to expect in your specific area and price-point.

We found over 1,100 listings that were “previously” on the market that closed in March. This was a very high number and during the higher selling months in the spring & summer this number should increase a lot.

There were 4,634 expired listings for all single family in March. This was 1,124 more than March 2006. This was not a record high, but we did hit a new record high for withdrawn listings. There were 2,449 withdrawn listings for all single family in March. This easily surpassed the previous record of 2,297 withdrawn listings in August 2006. With our current record high inventories more records will fall this year.

Days-on-market was 88.4 for single family detached in March. It was 89.2 for the first quarter, which is the highest first quarter DOM since 1998.

We had a very strong 2nd quarter 2006, so our housing “recession” will continue for a few more months, but I believe we will see increases by the 4th quarter this year. Also, we do have an election year next year, which usually bodes well for real estate.

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