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Weak Ending

Not only did the number of new single family contracts drop appreciably year over year in November (8 vs. 11), the large-end buyers seemed to disappear entirely.  For example, the average listing price of new contracts this November was $525,000, a far cry from the 2010 average of $1,400,000.  Taking out the one oceanfront, 2010’s average was still more than 2 times this year.

On the other hand, the condo/townhome market continued stronger by comparison.  There were 14 new contracts last month and only 11 a year earlier, with average price up almost 30% to $550,000.

So why the difference?  Are people in a position to buy the larger properties more uneasy about their prospects than others?  Hard to tell.  In any event, as noted in these reports before, one month does not make a trend.  Still, it is something to watch going into an election year.  By Spring, we will have enough data to make a judgment.  Next month, we will look at full year comparisons by individual markets as well as inventory/sales ratios.

Written by Leslie Kopp

December 12, 2011

October

Recent trends continued in October as single family contracts were half of the prior year, with only 5 transactions.  Unike last month, condo/townhome contracts were up but  only slightly (9 vs 7). This is two months in a row we have seen a very weak single family market.  Over the past 3 months, new single family contracts are off 16% from 2010 and condo/townhome new contracts are flat.

The question is whether these numbers portend another downward revision in sale prices.  After all, that is what was recently forecast by financial analytic company, Fiserv.  However, as noted before, the Bethany/Fenwick markets, incorporating the towns of Bethany, South Bethany, and Fenwick as well as the several communities in North Bethany, do not lend themselves to a national housing forecast.  Our buyers come from the relatively affluent areas of the suburbs of Washington DC, Philadelphia, Baltimore and Wilmington.  Macro numbers in these cities are comparatively stronger than many other regions.

Still, I am forecasting a weaker 2012 than 2011 for 3 reasons.  First, when consumer confidence is low second home sales suffer.  Second, 2012 is an election year and uncertainty of political direction leads to deferred decision-making.  Finally, I am seeing price resistance, not from buyers this time but from sellers.  While buyers continue to expect price concessions, sellers are increasingly walking away from low offers.  It is harder to get deals done now.  The gap between asking and selling price is narrowing.

Written by Leslie Kopp

November 2, 2011

September

Even though overall sales were down in September, interpreting the numbers this time does not lead to any definitive conclusions. We need to wait until we are further into the fall selling season to sense where the market is heading.

Single family contracts rose in September by 33% to 8 from 6 in 2010.  3 of the 2011 contracts were over 1 million compared to none the year before, another positive indicator.  However, the drop in condo/townhome contracts was significant, with 8 this year and 18 in 2010, down 56%.  What I don’t know is whether September was just a hiatus from a strong summer in the condo/townhome market or whether it is the start of a trend.

If we step back and look at the entire summer (July 1/September 30), we see a 2011 market that looks slightly stronger than the last two years: 

                                                 2011            2010            2009

Single Family                            31                 31                 32

Condo/Townhomes                  41                 38                 35

Written by Leslie Kopp

October 5, 2011