Zip Codes 34285, 34292, 34293
Based on my analysis of home sales in Venice, as of the end of February 2012, these are the trends:
- Sales will increase.
- Inventory levels will decline.
- Prices will rise to a historically sustainable annual average of 3%.
By any measure the number of homes for sale is way down. Two years ago, in February 2010, there were 1,232 homes for sale; in February 2011, there were 1,225 homes for sale. This February there were only 974 homes for sale --- in other words, there were 20% less homes on the market in February 2012 versus February 2010 and 2011.
Further, the pace of sales is increasing. 149 homes sold in February 2012, whereas, there were 133 sales for the same month last year and only 126 sales for the same month two years ago. This represents an average 15% increase in unit sales over the last two years.
Strikingly, this trend of accelerating sales, resulting in reduced levels of homes available for sale will likely continue. Pending sales, homes under contract but not yet closed, is considered a reliable indicator of closed sales for the next two months. In February 2012, there were 254 homes under contract, approximately 30% more than February 2010 and 2011. In February 2010 there were 187 pending contracts. In February 2011 there were 201 pending contracts. This indicates that home sales are strong.
Not surprisingly, the pace of sales has brought inventory levels, the number of homes available for sale, to a state of equilibrium. It is generally accepted that a six month supply of homes creates a fair balance between sellers and buyers. There is currently 6.8 months of inventory, a sharp decline, roughly 30% from the average 9.2 month supply in February 2010 and 2011.
This has resulted in a balanced and market sustainable 3% increase in prices. The median sold price in February 2012 was $140,000. This is 3.7% more than the median price of $135,000 in February 2010. Similarly, for the past twelve months, March 2011 to February 2012 versus March 2010 to February 2011, the median price increased 3.5%. Historically real estate prices increase 2% to 3% a year. Increases significantly greater, over a period of time, creates booms and busts from which we continue to reel. Accordingly, with sales strong, inventory levels down, and prices showing approximately a 3% increase, it appears the General Venice Market has bottomed out, and a slow and methodical recovery is at hand.
