You've heard of putting lipstick on a pig right? Well, that's what I'm going to try to do now. Sales in June were RELATIVELY good. If fact, they came in at 106% of last June. That is good news for someone who has been consistently writing about sales figures behind last year which was behind the year before which was behind the year before. OK, that's the lipstick. We're still only 82% of last year YTD. Inventory crept up 1% in June getting us back to 8% above close of business 2008. Our average monthly closing rate rose slightly to 118 SFHs (single family homes) for the first 6 months of the year. We're currently carrying 3,204 SFHs in inventory so that's a 27.3 months supply. That is almost 3 times the national average. That's the pig. As long as this inventory continues to rise there is little hope that prices will do anything but continue to come down. For the first half of 2009, Sellers received 92.6% of their asking price at the time of contract...not original asking price. The average sales price of a SFH so far this year is $336K, down from the total 2008 average of $379K. That's an 11% decrease. At the end of June, there were 301 SFHs under contract. This is higher than the 259 average for the year. That bodes well for July - August closings. Average listing prices are still significantly higher than sale prices coming in at an average of $445K so far this year.
CONDO/TOWNHOUSES (C/T) are doing even worse. With half of the year gone, sales of C/Ts is at 73.6% of last year to date. The average C/T sales price of $352K is only 4% below last years $367K. Sellers are getting 93% of their asking price. Inventory is up however from the beginning of the year by 7% and with an average of only 43 closings per month, this represents a 28.2 months supply, OUCH!! Many new less expensive C/T are coming on the market as reflected in the average listing price of $314K compared with last year at $410K. Builders are cutting standard features and the advertised prices are bare bones homes. Everything now is an "upgrade". Condo sales are feeling a more dramatic decline primarily because lenders will now longer lend to condo buyers without 25% down payment. This has taken many out of the market. The "good old days" of no money down loans are gone. This is actually a good thing as that lending practice is exactly what got us into this mess in the first place.
Speaking of lenders, interest rates fluctuated in Q2 from a low of 4.5% to a high of 6.25% and at the time of this posting are sitting at 5.25%. Many Buyers while waiting for the "bottom" in pricing found themselves paying a much higher interest rate that they would have had they not worried about timing the market. I higher interest rate over time will end up costing you a lot more than a few thousand more in the purchase price of a home. Jumbo loans (loans over $417K) are even harder to get and have really put the high end home buyer on the sidelines. I expect this to continue for some time making beach property prices even more attractive.
By the way, I just want to remind everyone who may be reading this post that all of the information (numbers) I get for my statistics are taken from the Sussex County Multiple Listing Service. Many builders do not report sales to this service so don't take these numbers literally but more directionally.
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