Marion Filley's Closing Comments: July
The start of the second half of the year continues to show some hesitancy in the market. Sales, at 26 for the month of July, were only one below July 2014. However, we are down seven units from the 15-year average for the month. The median continued its positive trend, coming in 8% above the same time last year. The average sale price, helped in part by two sales over $2,200,000, was up almost $70,000 over last year. Inventory rose to the highest first-of-the-month level we have seen since 2006, and the average list price of the inventory dropped more than $40,000 ,making it a total drop of more than $80,000 since June 1.
Year-to-date results continue to be mixed. While monthly transactions trailed July 2014, they were close enough to tighten the gap for the year to 8% below 2014. The median sale price remains double digits in percentage — and $80,000 — ahead of last year. However, average prices continue just slightly, under 2%, ahead of 2014. Total revenue for single-family homes is 6.4% below last year.
The level of the inventory is a concern. As we head towards the predicted increase in interest rates, it is frankly surprising more buyers have not jumped into the market. But there seems to be a general feeling that rates will not rise rapidly or into areas of discomfort. It may be that a median price over $850,000 is a resistance point. Certainly state economic issues (corporate jobs and tax issues) play a factor. We are also seeing very mixed results in other towns, some of which have increases in total transactions, but drops in median or average.
Higher inventory levels and lower average list prices going into a slower time of year is not the optimum scenario for sellers. The recent state budget calling for $1.3 billion in new taxes over the next two years is not helping the recovery. Our unemployment rate is behind the rest of New England with the exception of Rhode Island. The next couple of months will be telling and may give us a better sense of direction of the market, which continues to be much stronger nationally than in Wilton and Connecticut overall.