Closing comments: Sept. 19
While August represented the first month this year that was not equivalent to or ahead of the same period in 2012, there were plenty of other positive indicators. The 12% drop in sales volume is likely attributable to the very strong July we experienced. In fact May-August sales for 2013 were ahead of 2012 by a good margin. The 26.5% rise in median sales price is extremely encouraging, but to be fair, is only representative of a single month. The 10% rise in average price is also a strong indicator and seeing the average sale back over $1,000,000, if only for a month, is very pleasing. Inventory continues to run at its lowest five-year level with the highest average price we have seen in that period.
Year-to-date performance continued at a strong pace. While sales are down to a 19.6% increase, this remains robust and keeps the town on target to get back to 2007 levels. Median sales have not risen to double-digit increases. Average sales, on the other hand, are up over 13%. Total revenue, driven in part by the large increase in sales and average sale, are now up 35% above last year.
A look behind the numbers reveals some interesting changes taking place in the market. Where earlier in the year it looked like a strong possibility that we would exceed last year’s 102 houses sold under $700,000, the lack of inventory is making that increasingly questionable. The average house has the same number of bedrooms and bathrooms as last year. Average square footage is up very slightly with cost per square foot (a measure that is hard to quantify when houses in town have so many unique characteristics) up about $30.
The breakdown of sales and inventory indicates we are currently in a seller’s market up to $1,000,000. From $1,000,000 to $1,500,000, it is a flat or split market, with the upper part of the range still favoring buyers (absorption rate is still over one year and competition from other towns in the price range is an increasing factor). While the number of sales over $1,500,000 has almost doubled from this time last year, there is more than two and one-half years of inventory in the range (which can only be characterized as a buyer’s market).
Looking forward at the pipeline of houses with accepted offers, there are 26 homes under agreement, five of which are between $1 million and $1.7 million — 19%. Of the 17 homes with pending contracts there are four between $1 million and $1.45 million (one has been pending for over eight months), nevertheless this represents fewer than 24% of the pending sales. The fall is our secondary market, which continues to flourish below $1 million.