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February was not a favorable month in the housing market recovery.
NATIONALLY there are more housing on the market and fewer selling, months of inventory is up. The average price was down 1% for the month. The estimated decrease in value for the year is 5%, so one percent for one month is more than twice the rate expected. Take a look at the graphs: http://www.nytimes.com/pages/business/economy/index.html?src=busfn.
STEAMBOAT market is doing a little better. The single family home market is seeing a lot of activity with more property being bought and multiple offers. The condo market is still hurting. The article in the paper today: http://www.steamboattoday.com/eEdition/ on the front page quotes the county assessor saying market values could fall 20% between now and 2013. I am more optimistic than that!
As of January 1st, 2011 the article in the paper said there was 13.4 months supply of inventory on the market, and that a price stable market is about 6 months.
Nationally, experts agree somewhere around 6 months is a stable market. Smaller markets like Steamboat have a higher stability point, somewhere around 9 months. Which is closer to 13.4 and therefore we are closer to stability…..except!
Using one month of data in our small market creates great fluctuations in your data. Allow me to demonstrate; using the same search referenced in the paper, there are currently 149 houses for sale. In February there were 3 sales, resulting in 49.6 months of inventory. A HUGELY different market than 13.4 months.
If we take a three-month time frame (Dec-Feb), we have 24 sales which is 8 sales per month. To compute the number of months of inventory we divide the 149 listings by 8 sales to get 18.6 months. If we take the sales for the past year, we have 89 sales which is 7.4 per month. 149 / 7.4 = 20 months supply.
Using one month of data doesn’t generate statistically relevant results. 18-20 months is much more accurate than 49 or 13.4.
A year ago the market was at a three-year supply and we are already less than a two-year supply, so hopefully in a year from now we will be at a one year supply which is pretty darn close to a price stable market.
Stay tuned for real estate value expectations during the next year.
The season that tells us how the year will play out is just about here!
Consumer confidence is up to a three year high and has been rapidly increasing since last September.
Personal income levels are continuing to rapidly increase and are back to pre recession levels.
The market is seeing good activity, but the high inventory and foreclosures will continue to weight the market down.
We know the economy and real estate are getting better and will be appreciating in the future and we know that great deals are out there – it’s a good time to be a buyer!
In the seller and buyer tabs on the left of our web site: www.SkiTownRealty.net, are reports including our most recent Steamboat Price Forecast. If you care about real estate value, you might want to read it! Here are two articles about prices nationally:
Steamboats second home investment properties are continuing to cause lending issues. The average buyer wants to put down 20% or less. To do this, the loan must be government backed (Fannie Mae); institutional investors giving loans require 25% down. Many properties have at least one of two things preventing them from qualifying for 20% down payments. They are the percentage of owner occupants, and the number of people late with their hoa dues. Your broker needs to research properties by contacting the property management company and asking the right questions before writing an offer. It’s dragging some values down in specific properties.
Another week and another click downward in the condo buying interest, but a small uptick in the single family house market. There is definitely interest at the lower condo market. I’ve had several inquires over the past two weeks and had four people come through my open house this weekend, two of which were real buyers. Search all Steamboat’s condos for sale at www.SkiTownRealty.net/Home_Search/page_2307587.html
The April national average home price continued to increase according to the Case Shiller index, this is a positive sign for Steamboats market recovery.
My last Steamboat Springs Real Estate Market Report, available at www.SkiTownRealty.net, was about two months ago and showed the steadily improving market.
Since that time inventory has consistently increased and the under contract properties have decreased. There are currently about 745 condos and houses on the market in Steamboat. There are currently 33 under contract (pending); which is about 4%. The last time there was such little buying interest and this much supply was about 12 months ago.
The market has slipped the past two months into dangerous territory again, our recovery may be stagnating and take longer than anticipated. Stay tuned for the next market update at www.SkiTownRealty.net.