Gail n Greg - Your Agents @ The Beach

SALES STATS - OCTOBER 2009 - "MOSTLY" SUSSEX COUNTY

Just when we were getting used to the fact that people were out there buying real estate, the holiday season is now upon us and that usually means slow sales from here to February.  The reason I inserted the word "MOSTLY" into the heading of this post is because I noticed throughout the month of October, Keller Williams kept adding listings from upstate.  They have now opened up our MLS for other counties and this is going to skew my numbers somewhat.  By no means will all of the Kent and Newcastle listings get into our MLS, just some of them where the Broker is looking for additional exposure.  I can't quite figure out why, I don't sell anything up there.  Well, a case in point is that Single Family Home (SFH) inventory jumped up this month by 1.7% over September, a full 9% above end of 2008 inventory.  I think this is due primarily to the addition of these out of Sussex listings.  There were 3,242 active listings at the end of October, a 23.6 months supply based on the average closing rate of 138 SFHs per month YTD.  The average selling price however went up to the highest level this year, $382K per home bringing the YTD average price up to $348K.  This is due to the fact that more higher priced properties are starting to move, not that the home values are appreciating unfortunately.  Properties "under contract" came down by the end of October to 346, the lowest level in three months.  Some good news is that 178 SFHs closed in October, also the highest number of closings in any month this year and a full 14% ahead of October, 2008.  We're now at 94% of 2008 closings YTD.  The amount Sellers got for their properties as a % of listing price dropped to 91.1%, below the YTD average of 92.2%.  This is particularly troubling as one would think now that Sellers are listing at "closer to realistic" pricing they would start to get a higher percentage of their asking price.  This is not the case yet, and until inventory starts to drop you will not see prices firming.  Smart real estate investors now should start moving their focus off of price and on to interest rates.  With the Fed ending their mortgage backed securities purchasing program, rates are slated to increase by as much as a full percentage point or more. 

Now for you Condo/Townhouse (c/th) enthusiasts.  There's good news, closings were almost 35% ahead of October 2008 bringing us to 92% of last year YTD.  Inventory came up 2.4% to a YTD increase of 5.4% from end of year 2008 inventory.  The average selling price came in about the same as September, $327K which is well below the YTD average of $343K.  C/TH sellers got 92.5% of their asking price in October, more than the 91.5% YTD average.  THERE ARE SOME GREAT DEALS OUT THERE ON CONDOS.  HAPPY THANKSGIVING!!!

THIRD QUARTER/SEPTEMBER SALES STATS - SUSSEX COUNTY

It looks as though the housing market in Sussex County is coming in for a soft landing.  I'm not one of those who thinks that we're out of the woods yet but I'm also not one of those who thinks this "shadow inventory" is going to catapult us back into a renewed housing slump.  I called a bottom in the last month or so and have been patiently waited for the sales numbers to validate that call.  I think the September numbers offer that validation.  Single Family Home (SFH) inventory dropped in September by .9% from August to 3,191 properties for sale.  This is still 7.3% above the inventory on the books at the end of 2008.  Keep in mind however, that the end of year inventory is artificially low as many Sellers pull properties off the market around Thanksgiving and they remain off the market until January or February.  People just don't like the hassle of people coming through their house during the holidays.  Having said that, there are those who have been waiting for some sign of recovery before listing their property and that will continue to put pressure on inventory levels.  Closings for September came in at 107% of last September with 159 closings.  August was a big month for closings helping to bring the Q3 total up over Q3 of 2008 by 8%.  The good news is that properties "under contract" also rose slightly to 357 (up from 355 in August).  This is the third month in a row that "under contract" properties has increased.  In September, Sellers got 92.4% of their listing price at the time of contract and the average selling price of a SFH was up significantly to $362K (up from $327K in August) to the second highest level of the year.  This indicates that the higher end Buyers are creeping back into the market finally.  Unfortunately, we still have a 24 months supply of inventory based on the YTD closing rate of 133 per month divided into the current inventory of 3,191 homes.  YTD, we stand at 91.2% of the same time last year but we're gaining fast.  Average listing prices are still coming in way above average closing prices ($459K vs $362K) so Buyers and Sellers are still out of sync with each other.  There were 156 closings in the month of October, 2008 so we have a big nut to crack this year but I think we will get there if these banks will get off their butts and speed up the "Short Sale" process and get their appraisers under control.

The condo/townhouse (c/t) situation is not as rosy.  In September there were 54 properties reported closed to the MLS (remember, not all Builders report to the MLS).  This was only 95% of last September and only brings us up to 80.5% of last year YTD.  Inventory did come down 2.3% from August and properties under contract went up to 113 (from 111 in August).  This too is the third strait month for increases in under contract properties.  The average selling price of a c/t in September came way down to $326K (from $394K in August) and well below the YTD average of $345K.  This is probably due to deep discounting by Builders in an attempt to get these units sold.  We are looking at a 24 months supply here also.  Sellers got 91.1% of their asking price, above the 87.9% in August.  What we don't know is how much closing cost help and free or discounted "upgrades" Builders are offering as these are not reflected in the selling price.  This holds true for SFHs as well.  Here's hoping for a strong finish in Q4.

For anyone interested, click on the file attached to see the spreadsheet I work from....Download CountySalesStats

COUNTY SALES STATISTICS - AUGUST 2009

Truer words were never printed and apparently Buyers are starting to head as sales in August were the best of the year so far.  There were 170 Single Family Home (SFH) closing transactions in August compared to 140 last year.  That's a 21.4% increase over last year and in fact is the best closing month since May of 2008 which had 173 closings.  The average selling price however, came down in August to $327,300.  That's a full 11% lower than July's annual high of $366,945 and slightly below the YTD average of $339,488.  Also, Seller's received 93% of their asking price at the time of contract (the third highest of the year).  Properties under contract at the end of August rose to 355, 7.3% higher than July.  All of these positive numbers are only dampened slightly by the fact that inventory once again crept up .1% and still sits 8.2% higher than where we started the year.  As long as this trend continues, prices will stay depressed.  The jumbo loan situation continues to stifle the sales of high end property.  We are starting to see this abate somewhat.  Based on our current inventory of 3,219 properties and our YTD closing rate of 130 per month, we still have a 24.8 months supply of properties on the market.  That's over 3 times the national average.  YTD, we are 89% of last years closings for the same time period but are gaining ground (it looks like Q3, 2009 will exceed Q3, 2008).

Condo/Towns had a stellar month in August with 67 closings.  That's almost 29% more than August of 2008.  Average selling prices went way up as well to $394,388 (compared to $278,213 in July), significantly higher than the YTD average of $347,822.  Sellers only received 87.9% of their asking price however which is indicative of this very sloppy condo/townhouse market.  Even with this terrific month, we are still only 79% of last year YTD.  All signs are positive however.  Inventory came down by 1.8% and sits at +5.3% above end of 2008.  Under contract went up to 111, the highest point of the year so far.  Even with this, we are still carrying a 24.8 months supply (exactly the same as SFH).  Condos close to the beach area are doing notably better and "hot deals" are starting to dry up.  It looks like my "bottom call" from last month is holding up.

JULY SALES NUMBERS ARE IN.....SIGNS OF IMPROVEMENT

 Well we're in to the dog days of summer now and it's not only the weather that's heating up.  Real estate sales seem to be getting in to gear as well.  While Single Family Homes in July of 2009 ended up almost dead even with last year....163 closings vs 165 closings respectively.  The best news is that properties "under contract" rose by 10% from June to a YTD high of 331.  This would indicate that we should blow the doors off in August vs. last year.  OK, so we're now at 84.8% of last years closings YTD, up almost three full percentage points from June.  Inventory however crept up very slightly from June (.4%) to a total of 8.1% ahead of end of year 2008.  The average selling price of a home in July came in at a YTD high of $367,000, well above the YTD average of $342K.  Seller's only received 90.9% of their asking price at the time of contract, this is a YTD low (the average YTD is 92.2%).  The average listing price of a SFH in July was also up to $448K.  So let's review, our YTD average number of closings per month is now up to 124 SFHs and our inventory was 3,215 SFHs at the end of July.  You can do the math, that's a 25.9 months supply, down from 27.3 months supply at the end of June.  That's still around 18 months greater than the national average of 8 months supply.  STOP LISTING PEOPLE!!  Prices continue to be under a great deal of pressure, our Buyers are getting incredible deals right now.  The bad news is that interest rates are rising pretty steadily so Buyers would be wise to focus on "monthly payments" rather than "selling price" only.  1 percentage point on a 30 year mortgage can add significantly to your monthly payment.  In case you didn't notice, home prices rose in May for the first time in 2 years....WE'RE AT THE BOTTOM FOLKS.

Now as it relates to Condo/Townhouses....the news is much worse.  Closings in July were only 83.6% of last July and only 73% of last year YTD.  Inventory rose slightly (.2%) to 7.1% above end of year 2008.  "Under Contracts" rose slightly to 105, up only 6 units from June.  The average selling price of a C/T dropped dramatically to the lowest on record ($278,213).  This is 18% below the YTD average selling price of $338,103...WOW!  Also, Sellers received only 88.2% of their asking price at the time of contract (YTD average is 92.2%).  My wife and I have sold a number of condos recently and the Builders are offering incredible deals, one dropping prices a full 33% in one move.  I know of another that is offering Dewey Beach condos at auction for dramatically reduced prices.  I can't wait to see what they go for.  I have a feeling next month there is going to be some worse news on the C/T front. 

2ND QUARTER SALES STATISTICS - ALL OF SUSSEX COUNTY

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.

MAY SALES STATS - SUSSEX COUNTY, DELAWARE

 Well what can I say, it's not a pretty picture.  While May did show signs of an improving real estate market in Sussex Delaware, we're still running at a pace that is behind last year which was behind the year before which was behind the year before.  SFH sales in the County finished at 89% of last May ( the second best month this year relative to last year) and brought the year to date figure up to 77% of last year through May.  There were 154 closings in May (the most of any month this year) and well above the average so far this year of 110 per month.  The average sales price crept down a little from last month to $344K, slightly above the YTD average of $334K. Sellers got an average of 92.8% of their asking price at the time of contract.  This is right on the YTD avg.  Interestingly enough, the average listing price of a property listed in May (there were 402 listing events) was $463K...still way above the avg. selling price.  This is further indication that the more expensive properties are not selling with any vigor.  The overall SFH inventory came down 1% in May to reflect a 7% increase since December 31st of 2008.  This is good news as we can't expect pricing to stabilize until this inventory comes down.  At the current sales rate of 110 per month and a current inventory of 3,169 SFH properties on the market, that still represents a 29 month supply of homes.  The other good news is that homes under contract went up by the end of May to a YTD high of 306, well above the YTD average of 250.  This is a good forward looking indicator of closings to come.

Those of you in the Condo/Townhouse market are still waaaay behind.  There were only 52 closings in May, down 41% from May of 2008 which was down from the year before, which was down....well you know the drill.  The good news is that inventory did come down in May by 4% and now sits only 7% above the December 2008 close.  YTD Sales of condos sits at 70.2% of last year.  This number could be skewed by the fact that many new construction condos have been dumped on the market at very low prices and many of these builders do not report to the MLS system.  I have no way of capturing that data, I only know that I have sold several new construction condos that have not made it to the MLS.  The avg. selling price of a condo/town sold in May was $321K, down significantly from April's $354K.  Condos are really being hit hard by Lenders as they now require 25% down payment and offer no PMI (private mortgage insurance).  These are considered "riskier loans".  If you can only  put 20% down, you pay as much as 1.75% points higher on you mortgage taking it up into the mid to upper 6% range.  Condo/Towns under contract at the end of May stayed stable at 102 (April was 105).  Sellers got 93% of their asking price at the time of contract.  Unlike SFHs, this is much more in line with average listing prices which run about $384K.

There is a lot of first time home buyer activity right now.  Why wouldn't there be?  The incentives abound....$8K tax credit, FHA lending at 96.5% loan to value and many more homes available under $200K.  The foreclosure and "short sale" epidemic has also made it's way to the beach areas.  This is historically unusual but has become a reality in this recession.  Let's hope June brings with it not only sunshine and warm weather, but a prettier picture in real estate. 

COUNTY SALES STATS - APRIL 2009

 I think the Sellers have about run out of juice.  Prices have continued to decline driven primarily by new construction.  The builders are on the ropes, many have left projects incomplete and other more healthy builders have moved in on the cheap.  Ryan Homes has pretty much left town.  Anderson Homes has taken over a couple of their projects.  Equity Homes is gone.  There are more foreclosures and short sales than you can shake a stick at.  However, there is good news, SFH (single family home) sales have started to show signs of life.  While inventory went up in April another 3% (8% since the beginning of the year), homes under contract went up 25% to 285.  This means closings in May and June will pick up significantly and hopefully whittle away at this ever rising inventory.  Closings in April were 17% behind last April but were at a YTD high, up 8% from March.  The 134 closings we had in April brought the monthly closing average up to 99.  With 3,199 SFHs on the market, this represents a 33 week supply, down from the 36 week supply we saw at the end of March.  In May of 2008, we had the most closings of any month in the year with 173.  Let's hope we can get to that number in 2009.  The average selling price of a home in April was $354K, up from the $345K in March and 7% higher than the YTD average of $330K.  The average listing price in April was $451K, still a huge disparity (22% higher) from the average selling price.  There are a lot of first time home buyers coming into the market to take advantage of the new stimulus ($8,000 tax credit) programs.  First time home buyers that qualify can also get an FHA loan with only 3.5% down.  Financing is definitely becoming an issue.  It is getting harder and harder for the average borrower to get credit.  Interest rates are still at historical lows (around 4.5 to 5.0%) if you can get it.  Lenders are swamped with re-financings.  Finally, Sellers got 93% of their asking price at the time of contract which is right on the YTD average.

Condo/Towns represent a whole other challenge.  First the good news.  Closings of condo/towns were at 108% of last April coming off of a good March.  Prices have come down dramatically in some new construction communities.  However, YTD sales are still only at 75% of last year.  The average selling price of a condo/town in April was identical to SFHs, $354K.  This is down from March by 12% ($402K).  56 condo/town closed in April bringing the monthly average up to 39 YTD.  Sellers got 94% of their asking price.  Most of these were new construction.  With 1,268 active listings, this represents a 33 months supply, still a strong Buyer's market.  Units under contract (like SFH) went up 27% to 105.  Now the bad news, Fannie Mae is now requiring condo buyers to put down a minimum of 25% on their purchase.  This is problematic for many Buyers.  Piggy back loans are impossible to find.  I think this is putting a lot of downward pressure on condo sales.  Great deals abound!!!  We're seeing a lot of activity right now, lets hope it continues.

SALES STATS - MARCH & Q1-2009 - SUSSEX COUNTY

  Well, maybe things aren't HOT yet but to borrow a phrase I keep hearing on the financial news networks, things are "less bad".  March SFH sales in the county finished at 94% of last March bringing the first quarter number up to 69% of Q1, 2008.  There were 124 closing transactions (SFHs) in March.  Again, I get these figures from the Sussex County MLS and not all agents are prompt about getting updates into the system so some closings in March may be carried over on my spreadsheets into April.  However, I do this every month and I'm consistent so the comparisons should be apples to apples.  Listing transaction picked up in March as well which we knew they would (all of the properties that withdrew last November and December are coming back on for the spring selling season).  This actually pushed the inventory up another 2% from February and we are now up 5% from the end of 2008 to 3,132 SFH properties listed.  Our average selling rate for the first quarter was 87 properties per month.  That's right, do the math.  That's a 36 month (3 years) supply.  However, if you use the 141 closings per month rate that we averaged in 2008, that brings it down to a 22 month supply.  I anticipate 2009 to be a much bigger year than 2008.  I feel that we have definitely hit bottom.  The average selling price of a SFH in March was $345,282, up 14% from February bringing the average selling price for Q1 to $317,035 (still very low for this area).  This reflects the fact that higher end properties are not selling right now (jumbo mortgage rates are much higher than conventional) and the sweet spot for home sales right now is in the $250K to $350K range.  Beach prices have come down though so I expect we'll see a big difference in April & May.  Seller's got 92.6% of their asking price at the time of contract (not original asking price) which is right on the quarter average of 92.4%.  Properties under contract (our only forward looking statistic) stayed right at February's level of 229 (vs 230 in Feb).  That is somewhat troubling.

Condo/Townhouse sales finally got going in March.  They finished at 98.3% of last March but still remain 26% behind Q1 of 2008.  These condo prices are very attractive right now.  I can't believe more people aren't jumping in.  Lender are however, making condo buyers put down 25% in order to get the good interest rates (currently around 4.5%).  57 Condo/Towns closed in March for an average $402,439, up dramatically from February's $334,542.  Seller's got 92.7% of their asking price.  Inventory sits at 1,257 units or 38 months supply based on the Q1 running rate.  Using the 2008 annual running rate, brings it down to 19.6 months, whew!  Units under contract actual went up a little to 83 from 79 in February.  Inventory is up 10% however from the end of 2008.  I think next month we're going green with the numbers.  There are many positive indicators, rising stock market, lowest interest rates in many years (maybe ever), stimulus package, foreclosure mitigation efforts, great selection and a lot of pent up demand.  2009 is going to be a good real estate year.

FEBRUARY HOUSING STATS - SUSSEX COUNTY

  OK, I'm going to try to keep this as upbeat as possible.  See the man in the picture?  He's ready to get serious about getting to the beach.  Hopefully many other smart Buyers are ready to make that dream investment on a beach property now so they can be settled and in by warm weather.  You know what they say about the markets, when everyone else is gloom and doom...that's when the smart money jumps in.  Inventory of SFHs rose by just under 4% in February.  This was expected as many people withdrew listings in November and are just coming back on.  We currently are up 3% from the December close.  There were a total of 3,049 SFHs listed for sale at the end of February.  The closing rate in February was virtually the same as January which is also no surprise based on the homes under contract in December (they would be closing in February usually).  There were only 69 SFH closings in February (67 in January).  Using our average closing rate for the full year of 2008, we are carrying a 21.6 months supply of inventory (still very high).  The number of SFHs under contract at the end of February rose by 15% from the end of January to 230.  This means we can expect around 115 closings in the month of April (around 100 in March).  This is still significantly less than the same period a year ago.  The beach season however, historically starts in March/April as people want to get into their new homes for the season.  The average selling price of a SFH in February inched up over $300K ($302,652), up from an all time low in January of $280K.  Seller's got 93.2% of their asking price (at time of contract) in February which is the highest since last September.  This is another reason why serious Buyer's should move now because as soon as Seller's get an inkling that the market is starting to improve, they will be much less anxious to negotiate lower than asking prices.  The YTD statistic is ugly....we're at 55.7% of last year, same time.  We are seeing much more traffic in the last several weeks, I think there are some savvy Buyers out there.

Condo sales are faring even worse, only 24 closings reported on the MLS.  The average closing price was $334,542.  Inventory rose slightly and is now 7% ahead of the December 2008 finish.  Units under contract also went up by 30%.  This bodes well for future closing rates.  YTD closing rates for Condo/Townhouses is only 43.3% of last year, same time.

JANUARY 2009 GETS 3 STINKERS

      That's right, 3 stinkers.  We started the new year much like the old year finished.  This is not a surprise.  First of all, properties under contract were at a three year low at the end of December.  This tells us that there will be record low closings for the next couple of months.  Well guess what?  properties under contract spiked up a little in January but still ended the month at the second lowest level since I've been keeping records (2 years) at 200.  Just to put this into perspective, the average SFH properties under contract in 2007 was 374 and in 2008 it was 273.  This statistic comes from logging the "under contract" number at the end of each month and taking the average of those 12 numbers.  Secondly, January & February are seasonally slow months.  SFH closings in January hit a multi year low of 67.  This was less than half the number of closing that too place last January.  Last January by the way, was the last month before thing starting getting really bad.  Looking back to 2006 & 2007, this January closed only 28% & 40% of these years respectively.  The good news is that SFH inventory dropped slightly in January (1%) from the end of December which represents a 21 months supply (2,942 SFHs) based on the average monthly sales rate from 2008. OK, we all know it's bad out there right now but the really surprising statistic is that the average selling price for a home closed in January was $279,567.  That's waaay below any month in my records.  Just so ya know, the average selling price of a SFH sold in 2006 was $403,852 and in 2007 it was $405,919 and in 2008 it was $379,227.  I saw one of our local agents on TV the other night who was trying to say that the high end luxury home market in this area was only down a few percentage points.  That's utter garbage!!  I wonder if he lies like that to his clients.  The average price of a SFH listed in January was $413,199 which is actually the lowest number in my records so it looks like Sellers are starting to get more realistic.  Again, remember that the average selling price does not necessarily mean that values have dropped that much, just that people are buying more less expensive property.  It's difficult to determine what the actual value reduction has been.  The National Association of Realtors use "Mean Pricing" which is when you figure the price at which the same number sold for more as sold for less. Sellers received 91.1% of their asking price (at the time of contract, not original asking price) in January.  This is also the lowest number since I have kept records.  In January of 2006, Sellers got 96.1% of their asking price.

Well, you think SFH sales were bad, check out the Condo/Townhouse situation.  Closings in this category reached only 35% of last January with total closed transactions of only 18 units.  This is down 68% from the 2008 average of 57.  Inventory jumped 5% from the end of December to 1,195 at the end of January.  The average selling price was $333,222, down only about 9% from the 2008 average of $367,429.  If you have a condo to sell, good luck.  If you are looking to buy one, name your price.  With interest rate hovering around 5%, it's a great time to buy!!!