It is common to compare sales activity in a given month to the same month one year ago. Although important, a more reliable indicator of trending activity is to use a three month rolling average. Accordingly, below I will recite sales activity in Venice for this past month, November 2016, and compare it to November 2015. But, please pay particular attention to sales activity for the most recent quarter, September to November 2016, and compare it to the same quarter last year.
Closed Sales. There were 130 closed sales in November 2016 and November 2015 — identical. For the current quarter there were 443 closed sales, compared to 439 for the same quarter one year ago; a 0.9% increase.
Active Listings. There were 235 new listings in November 2016, 220 in November 2015; a 6.8% increase. For the current quarter there were 697 new listings, and 591 for the September to November 2015 quarter; that is a 17.9% jump.
Months of Inventory. In November 2016 there were 5.2 months of inventory based on closed sales, whereas, it was 3.6 months one year ago. That’s a 44.1% increase. For the most recent quarter the average was 4.2 months, whereas, one year ago for the same period it was 2.9%; a 45.6% increase. Monthly inventory levels have consistently been under 4 months, creating a seller’s market. 6 months is considered a balanced market between sellers and buyers. Accordingly, we will carefully monitor future month inventory levels, since it is trending higher. It’s all about the laws of supply and demand. Lower the inventory, higher the price. Higher the inventory, lower the price, creating more bargaining opportunities for buyers.
Selling Price. Prices continue to appreciate, as indicated below. Pleases note, however, if over the next quarter inventory levels continue to rise, then I expect there will be a slow-down in the pace of appreciation, and for the reasons described above.
- Average Sold Price. In November 2016 the average sold price was $269,000, compared to $240,000 in November 2015; a 12.1% jump. For the current quarter it was $264,000 versus $242,000 for the same quarter one year ago; a 9.1% jump.
- Median Sold Price. Although average statistics, as distinguished from median statistics are important, I find that median statistics tend to be more reliable because median statistics, by their constitution, discount the outliers. In November 2016 the median sold price was $237,000, compared to $215,000 in November 2015; a 10.2% jump. For the current quarter it was $229,000 versus $213,000 for the same quarter one year ago; a 7.5% jump.
- Average Sold Price Per Square Foot. In November 2016 the average sold price per square foot was $166 per sq. ft., compared to $152 per sq. ft. in November 2015; a 9.2% jump. For the current quarter it was $165.34 per sq. ft., compared to $150.95 per sq. ft. for the same quarter one year ago; a 9.5% jump.
Days on Market. In November 2016 homes stayed on the market for 63 days, whereas, one year ago it took 60 days; 5% longer from listing to contract in November 2016 versus November 2015. Similarly, for the current quarter it took 66 days, compared to 63 days for the same quarter last year; a 4.8% increase. So, when properly priced, and as set forth above, with a current 5.2 month inventory, homes are selling, on average, in 2 months. However, if inventory levels continue to increase, it will increase the time it takes to sell a home.
For Sale/List Price. In November 2016 the average active list price was $360,000; it was $361,000 in November 2015. Essentially, unchanged at 0.3%. Please take particular note that the active for sale list price was $358,000 for the most recent quarter, identical to the same quarter last year. This is another indicator that the market is beginning to cool down, that the supply is increasing.
Sold Price vs. List Price Ratios. A ratio above 97% between sold price and original list price is good. The higher the ratio, the hotter the market. The lower the ratio, the cooler the market. In November 2016 the sold price to original list price ratio was 94%, 95% the same month one year ago; down 1.1%. The past quarter results compared to the same quarter last year was unchanged, likewise respectively 94% and 95%. This is all an indicator of a possible market cool down.
Foreclosures, Short Sales & Auctions (Distressed Properties). The number and percentage of distressed sales impacts market values. 5% or less bespeaks a strong market; however, more than 10% has a negative impact. This past month there were 8 distressed properties for sale, and 4 sold. That compares to 28 for sale and 15 sold for the same month last year. Likewise, for the current quarter there were 25 homes for sale and 16 sold. That compares to 70 for sale and 46 sold for the same quarter last year. This all correlates to 3.6% of all sales being distressed properties. That is very good. Distressed sales are not having any meaningful impact on fair market values.
Wishing you, from our corner of Sunny Florida, a Very Merry Christmas, Happy Chanukah and Joyful New Year.