Happy New Year!!! Real estate finished strong (relatively speaking) in Q4 of 2011, 13% ahead of Q4-2010. Total annual dollar sales were approx. $610,958,000 in Single Family Home (SFH) closings. That was an increase of 3% of total dollar volume in all of 2010 (+5.2% in closing transactions). Total dollar volume in 2006 was around $1.1 billion. There were a total of 1,779 SFH closings reported to the MLS this year or an average of 148 per month. The average selling price of a SFH in 2011 was $343,428, down 2.1% from last year and almost dead even with 2009. By comparison, the average selling price of a SFH in 2007 was $406,000. Sellers averaged 92.2% of their asking price at time of contract, down slightly from 92.8% last year. Inventory at the end of this year was 2,644 SFH units, down 1.3% from the end of December 2010. This was the first time this year inventory was negative vs. last year. There were 106 expired listings at the end of December so many of those will come back on the market before the spring selling season begins. The bottom line is that inventory continues to be a problem for Sellers and re-sale prices continue to slide. Many Builders do not report sales to our MLS and many of the sales this year were new construction. NV/Ryan Homes claims that they represented half of the new construction homes sold in Sussex County in 2011 and they do not report sales to our MLS. At the current average monthly sales rate, our current absorption rate (total inventory divided by avg. monthly sales) sits at 17.8, still way to high to expect much pricing stability. Many new construction developments are holding pricing and reducing incentives so this will hopefully help re-sales. Interest rates are still great, around 3.875% for a 30 year fixed. All in all, a good finish to the year. We hope it is a trend that will continue into 2012.
Condo/Townhouse (C/T) sales continued to languish right to the end of the year finishing at just 97% of 2010 in number of closings (613 vs 631 last year) and just 87.5% of total dollar sales ($182,174,000 vs $208,241,300). Average selling prices were down 9.9% from 2010 at $297,184 vs $330,018 last yer. Sellers got 94% of their asking price at the time of contract vs. 93.3% last year. Just to show you how bad this is, in 2007 (the peak year) there were 1,077 closings for a total of $422,891,000 in sales and Sellers got 96% of their asking price. Inventory at the end of 2011 was down almost 13% from the end of 2010 at 904 C/Ts listed for sale, the lowest level of the year. The fourth quarter of 2011 did however show good momentum finishing up 12% from Q4 of 2010. Hopefully this momentum will carry over into 2012. It has become much harder to buy a condo however, than in the past. Lenders are being very difficult when it comes to condos (especially as a second home or investment property). Prices have really come down because of that however, so it's great for those Buyers who can get loans or have cash. For contrast, in 2007 the average selling price of a C/T was $392,656 and in 2011 it was $297,184 or almost 25% less. C/T prices were actually down a full 10% in 2011 from 2010. The good news is that the economy is showing signs of improvement and unemployment is ticking down (albeit ever so slowly). Barring any major disaster, 2012 should be the turn-around year for real estate. Buyers, right now could be your best shot at a "bottom" in real estate.
As always, if you have any questions or want more information regarding this material please contact me directly by phone or email. Remember, these figures are calculated daily through my analysis of the Sussex County MLS and are totally dependant on the accuracy thereof. Many Builders do not report sales to this MLS nor do For Sale By Owners. Also, our MLS service allows some other Counties to input data to ours and I try hard to make sure those numbers don't get into my analysis. Actual closing dates may not coincide with mine exactly as some agents take longer than others to load closings into the MLS. I report daily so my cut off is the last day of the month/year. If they report several days later, it will show up in my data for the next month/year. This analysis is intended to be used directionally, not literally.
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