The State of the Venice Real Estate Market – August 2011

It is encouraging to report that in Venice (zip codes 34285, 34292 & 34293) there continues to be a significant improvement in the sale of homes from the same period last year.  There is currently a 7.2 month supply, basically the same as last month’s 7.1 month supply; this represents a 100% drop, “improvement” from last year --- a year ago this time there was a 14.3 month supply of homes for sale.  A 6 month supply is considered a fairly balanced market between sellers and buyers. Better yet, it is likely that the supply of homes available for sale next month will continue to decrease.  Pending sales, i.e., properties under contract but not yet closed, coupled with the number of properties for sale is a good indicator (not a guaranty) of the following month’s closed sales.  As of August 31, 2011, there were 146 pending transactions and 974 homes for sale.  At the end of July 2011 there were 139 pending transactions and 1,012 homes for sale.  In other words, there were 38 less homes for sale in August 2011 from July 2011 and 7 more homes under contract but not yet closed.  What this means is that if current trends hold, we are very close to a balanced market, a fair supply of buyers to sellers --- that is a very good thing. What’s helping is that more sellers are pricing their homes in alignment with current market conditions. It makes all the difference in the world. These are the facts:

• In August 2011, the average listing price was $253,000.  In August 2010 it was $261,000 --- so, the average listing price was 3.1% less in August 2011 from August 2010.
• The average square foot price for homes sold in August 2011 was $98/sq. ft.  In August 2010 it was $108/sq. ft. ---- that represents an 8.7% drop in prices, year to year, on a square foot basis.
• The average sold price dropped 7.3% year to date, from $177,000 in August 2010 to $164,000 last month.

It is generally accepted that if properly priced, a home should sell within 10% of its list price, regardless of market conditions.  This is precisely what occurred in August 2011, where there was a 7% price differential between the sale price and the final, reduced list price. Conversely, if over-priced it is generally accepted that a home will languish on the market, until such time as the seller reduces the list price to no more than 10% of its market value. Sellers often believe that by setting a higher list price it will give them “room to negotiate”.  However, the facts show it just doesn’t work that way.  If priced to high, most buyers will not even take a look, they’ll just drive by, and not play ball.  The fact is today’s buyers understand “value” ---  through the internet all of the information and tools are at their disposal, and so they just say “no” to overpriced properties. ________________________________________________________________________________ The statistical data contained herein has been extracted from Reports independenty provided by ©Trendgraphix, from data obtained from the Multiple Listing Service.  This Report covers properties within the 34285, 34292 and 34293 zip codes.