If you see RED, it ought to get your attention.
Here is a seriously RED number: February 2011 returned a lousy 448 single family sales. That was 10% lower than… February 2009. In February 2009, for all intents and purposes, the local real estate market was declared in a flat spin and the popularity of gold was spiking. Last month saw 10% fewer sales than that month. Yes, the March Stat Pack is cooked and served up HERE.
Yet at the same time, listing volume was down by a similar amount. One of the slowest inventory builds ever witnessed happened in February 2011. Combined with 5 days that saw 0 degrees for the high, there is plenty of reason why the short 28 days of February saw such low sales activity:
- There wasn’t much to buy in the first place…
- Rates started to climb then began to drop at the month’s end as things heated up in the Middle East, oil started to rise and Wall Street got nervous
- It was cold outside. REALLY cold.
- And shoot, there still was not much to buy.
Here is a chart that compares the market on March 1, 2010 to March 1, 2011. Remember that one year ago there was an $8000 tax-credit carrot enticing first-time buyers into the market. That carrot is not here. That single reason is why the low sales of February 2011 (lowest February totals since 1997) saw a $28,000 average sales price increase from one-year prior.
The inventories year over year are very similar and the rate of sale is actually similar for the trailing 90 days. But what is red indicates what is lower:
- the number of listings for sale, especially over $400,000
- the number of sales, especially under $250,000
- the months of inventory, especially over $250,000.
In other words, the game is changing: the bread and butter of the winter months, local first-time buyers: for now, they’re done. They bought last year. Or the year before. But who is starting to buy: relocating buyers that saw the writing on the wall in 2007 and didn’t buy and now are hungry for a deal. They typically buy on a shorter timeline (three to ten days of shopping, lots of online use) and generally buy the best-available home.
As bleak as the unit sales were for February, almost every other index worth watching showed health returning to the market: interest rates ended up dropping 0.2% at month’s end, supply actually went down, demand began picking up (1099 pending and under contracts on March 8, 2011), months of inventory shrank and average price spiked.
Read it all HERE.