The inventory of properties available for sale in Venice (zip codes 34285, 34292 & 34293) has been declining since the end of last year; although for the last 4 months it has remained fairly constant, hovering around a 6 month inventory of homes available for sale. There is currently a 6.4 month supply of inventory, and 1,049 homes for sale. The months of inventory for March was 6.1, April 6.5, and May 6.0 (revised from 6.1 as reported in last month’s State of the Market Report). A 6 month supply is considered to be in a state of “equilibrium”, i.e., a fairly balanced market between sellers and buyers. There were 165 closed sales in June 2011. 94.5% of the sales were for less than $400,000, of which almost ½ were under $150,000:
- 80 sold for less than $150,000 (48.5% of the market).
- 56 sold between $150,000 and $249,999 (34% of the market).
- 20 sold between $250,000 and $399,999 (12% of the market).
- 9 sold for over $400,000 (5.5% of the market).
Not surprisingly, the strongest segment of the market in June was for properties under $250,000, which had 5.2 months of inventory, based on closed sales, staying within May’s 5 month inventory range. However, properties between $250,000 and $399,999 showed points of stress, with the greatest month to month increase in inventory and decrease in sales of any market segment: June inventory was 10.5 months, only 20 homes sold; whereas, May had a 6.6 month inventory and 32 sales. The next few months will indicate whether this evidences a bump in the road or a sign of weakness in this market segment. Greater than $400,000 and less than $699,000, there is a 12.8 month supply --- there were 8 sales in June out of 102 for sale, versus, 11 in May out of 106 for sale. In June there were 22 homes for sale between $700,000 and $999,999, 1 sold and 1 went under contract, representing a 22 month supply. The one sold home was the first sale in this price range since February 2011, and only the second for the year. There were no sales for over $1,000,000 in June, although year to date there have been 5 sales. Interestingly, frustration with the luxury end of the market seems self-evident in that in June there were only 10 properties for sale over $1,000,000, in May there were 17 homes for sale. Accordingly, 7 homes, representing 41% of the homes for sale over $1,000,000, were either withdrawn from the market or expired. Short sales and bank owned properties (“Distressed Properties”) accounted for 16% of the properties for sale in June, 166 out of 1,049. However, they sold at a faster pro-rata percentage pace than non-distressed properties, 25% of all sales in June, 42 sales out of 165. Further, their impact on overall sales was 5% greater in June than in May; in May there were 36 distressed sales out of 181, representing 20% of all sales. Whereas, we reported last month that there were 4 distressed sales above $250,000 in May, in June there was only 1, notwithstanding that the total number of distressed properties available for sale in May and June, 27 each, remained the same. The bulk of all distressed properties for sale, 84%, were under $250,000 --- 139 distressed properties out of 166 for sale. As referenced in the beginning of this article, in June, the inventory for all real estate of all types was 6.4 months. However, separating distressed properties from the pack, in June there was only a 4 month inventory of distressed properties (in May it was 4.7), as distinguished from a 7.2 month supply for non-distressed properties (up from 6.3). The reasonable construction to be drawn, and as has been widely reported, is that as the number of distressed properties available for sale increases over the next several months, inventory levels will increase, creating more days on the market for non-distressed sellers and creating further downward pressure on pricing (See Michael Braga’s story in Thursday’s July 14, 2011, Herald Tribune, “Foreclosure Filings on the Rise Again”
http://www.heraldtribune.com/article/20110714/ARTICLE/110719785/0/news0104). However, it is important to note that in Venice, the impact an accelerating surge of distressed properties will have on increasing inventory and days on the market, and reducing prices, will not be evenly felt at all price points. For homes priced under $250,000, which is where most of the distressed properties are found, the impact will be significant. However, over $250,000, where only 1 distressed property sold in June, it is unlikely, barring any unforeseen circumstances, to have a material impact on inventory, days on the market or sale prices.
The statistical data contained herein has been extracted from Reports provided by ©Trendgraphix, July 2011, covering properties within the 34285, 34292 and 34293 zip codes.
