Marion Filley's Closing Comments: Aug. 14

Looking at July 2014 requires a healthy dose of perspective. On the surface, the 34% drop in closings (from 41 to 27) compared to 2013 would seem to be cause for real concern. However, July 2013 represented the single largest number of sales in one month since 2006 and July 2014 was equivalent to or greater than the same month 2007 through 2011.

The $60,000 (6.1%) drop in median price for the month may end up being more significant. The average, running less than a reduction of 1.2%, is also surprising,  given the difference in unit sales. Inventory dropped to 160 and continues the pattern of being slightly ahead of 2013, but at lower levels than 2008-2012. The average price of the inventory rose by close to $22,000.

July had a significant impact on the year-to-date numbers. We are now running 30 closed sales behind 2013, a gap (18.1%) that would seem extremely hard to make up this year. The median price is now running $5,000 below last year (0.6%). The average selling price is currently the lone positive figure with a slightly greater than $40,000 gain over last year (4.7%). With the large decrease in sales, the total single-family revenue is trailing 2013 by almost 15%. Unless there is a surprisingly large surge of sales prior to the opening of school, it is likely the year-to-date numbers will remain approximately the same.

Depending on the fall market, it would appear that we are setting up for the same sort of performance pattern we witnessed in 2012. Continuing high demand for the lower end of the market with slower demand in the high end. Inventory is also shrinking in the $1,000,000 to $3,000,000 range. Without more well-priced houses in this range, it is hard to see significant increase in average price. It also appears as if there is a reasonable chance that most or all of the 18% gain in number of sales from 2012 to 2013 will be given back.