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August YTD Observations from Mike Orr at The Cromford Report

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Blog by Doug Ingersoll | August 4th, 2016

Market Summary for the Beginning of August

The market conditions improved a little for sellers once again during July, with the Cromford® Market Index breaking through the 145 level with some momentum as we enter August. However there is still no dramatic new trend showing up, just a continuation of those we have been seeing for several months now. Sales momentum was actually stronger than it appears from the numbers posted during July. With a weekend at either end of the month we had only 20 working days to get deeds recorded compared with 22 in July 2015. Many people are surprised that the number of working days in a month makes a big difference, but after 14 years of measuring I can assure you it definitely does. In any case it is normal for July to be much quieter for closings than June. This is a seasonal pattern that is seen every year.

Here are the basic ARMLS numbers for August 1, 2016 relative to August 1, 2015 for all areas & types:

  • Active Listings (excluding UCB): 19,711 versus 19,459 last year - up 1.3% - but down 3.7% from 20,458 last month
  • Active Listings (including UCB): 23,801 versus 22,837 last year - up 4.2% - but down 4.2% compared with 24,856 last month
  • Pending Listings: 6,824 versus 6,327 last year - up 7.6% - but down 2.5% from 6,985 last month
  • Under Contract Listings (including Pending & UCB): 10,897 versus 9,705 last year - up 12.3% - but down 4.3% from 11,383 last month
  • Monthly Sales: 7,776 versus 8,046 last year - down 3.4% - and down 13.2% from 8,860 last month
  • Monthly Average Sales Price per Sq. Ft.: $138.22 versus $132.79 last year - up 4.1% - and down 2.0% from $141.03 last month
  • Monthly Median Sales Price: $225,000 versus $211,000 last year - up 6.6% - but down 2.2% from $230,000 last month

We can see that the shortfall in closed sales during July is compensated by strong under contract and pending numbers at the start of August, just as we would expect for a short month.

Below $175,000 we see a large drop in sales volume compared with July 2015, caused by the weak supply. Unit sales were down 29% with the biggest percentage fall for homes priced between $100,000 and $125,000 (down 52%).

Between $175,000 and $300,000, sales were up 10% with $250,0000 to $275,000 growing the most at 21%

The range from $300,000 to $350,000 was just a tad weaker than last year, but between $350,000 and $600,000 we saw a 12% increase in sales compared to July 2015.

Between $600,000 and $2 million, sales were very weak compared with July 2015, down 17% from 346 to 286. However the market over $2 million rebounded with 26 sales compared with just 19 in July 2015.

We are now at the point where inventory hits its minimum level in most years. New listings are arriving only 3% faster than last year and we have seen quite a lot of cancellations, especially at the higher price points. We will be looking to see what sort of inventory growth we get between now and the next peak at the end of November.

Demand is currently holding up, some 5% higher than we would consider normal. However the market conditions are probably going to be determined by changes in the supply. How much and at what price points will the new listings arrive?