Midway & Forest Residential Real Estate Summer 2018 Market Update

By: Kaitlin Davison, Broker at Merchant Davison Real Estate

As the Senior Research Analyst for Keller William’s headquarters, I taught other agents how to use this information to become the “local market expert” and “economist of choice” in that market. In my time with Keller Williams, I hired and supervised their head economist and developed market reports that agents still use today to market their businesses. 

The first and most basic tenant of the real estate market is: location, location, location. What’s happening locally is almost all that matters. Sure, it’s nice to understand what national economic or political conditions could impact our local market. But when it comes down to what matters, it’s our neighborhood metrics that matters most. 

What’s happening in one price range vastly differs from what’s happening in another. By breaking down that activity by price range, as our neighborhood spans a wide range of prices, we can look at data that is more actionable than broader research materials.

Midway & Forest Home Sales

In our neighborhood, the summer selling seasons had some interesting results. Homes that might have sold to owner occupants last year are being purchased by home builders or consumers who are planning to building. 

SALES: How Many homes sold?

Over the summer, 17 homes sold. Below is a table with the break down of the price ranges of the sales comparing this year to last year.

 

Price Range

Summer 2017

Summer 2018

Under $650,000

10

6

$650,000-999,999

9

6

$1-1.5 million

3

4

Over $1.5 million

3

1

Three homes that were listed over the summer are currently under contract and awaiting the sale closing.

  • One was listed at less than $650,000

  • The other two were listed between $650,000 and 1 million.

Overall, the number of homes that sold is down 30% from last year. Nationally, the number of homes sold during this same time period was down 1%.

What this means for you: It could point to a slowdown in the local market. It could also just be a shifting of timeframes in which people buy. Some years, more home sales happen earlier or later in the year. This is something that we will keep an eye on and does not necessarily mean a market shift. It could also be a result of increasing prices and more buyers getting “priced out” of the area.

Prices: How much did they sell for?

Below $1 million, there has been a substantial increase in home prices in our area. Part of this is driven by increasing lot values. The numbers below are for the summer months only, which is traditionally the busiest season in the industry.

What this means for you: If your home is not new, relatively recently built, or completely remodeled, you’ve seen a substantial bump in home price this year. A significant portion of this comes from the increasing price that home builders and homeowners planning to scrape and build are willing to pay for lots. Of course, this is not the only factor. Many of the sales are to owner occupants who will enjoy the home in its current or near-current condition. 

 

Price Range

Summer 2017 Average Price

Summer 2017 Sales

Summer 2018 Average Price

Summer 2018 Sales

Percent Increase in Price

Under $650,000

$519,000

10

$565,000

6

8.8%

$650,000-999,999

$720,000

9

$811,000

6

12.5%

$1-1.5 million

$1,210,000

3

$1,243,000

4

2.7%

Over $1.5 million

$1,673,000

3

$1,780,000

1

6.4%

List-to-Sales Prices: How much did it sell for?

  • Three sold for more than their list price. Two of those three sold for more than the asking price after taking a price reduction.

  • Two were at list price with an additional that was sold list price after a reduction.

  • 5 were sold at 98-99% of list price.

  • 6 were sold at 90-94% of the original list price.

  • One home sold at less than 90%. 

 

List-to-Sell Price Ratio

Number of Homes

Greater than 100% (over list)

3

100% (list price)

2

98-99%

5

90-94%

6

Less than 90%

1

Days On Market: How long did it take to sell?

Under $1 million, it took about a month on average. Slightly longer under $650,000 and slightly faster closer to $1 million.
Over $1 million, it took closer to three months. Over $1.5 million went quickly with only 6 days on market.

What that means for you: If your home is over $1 million, expect greater volatility in how long it takes to sell. Days on market ranged from nearly 8 months or 230 days (not a new build) to 4 days. 

Days On Market

 

Price Range

Average Days on Market

Under $650,000

40

30

$650,000-999,999

20

$1-1.5 million

104

84

Over $1.5 million

6

 

What about the “Failed Sales”?

So far, I’ve discussed just the homes with successful sales. 17 homes sold, 14 did not sell. Some were relisted, some have had long histories of on-and-off the market and price drops. Often this is a red flag to future buyers who wonder “what’s wrong with this? why hasn’t it sold?” We have a list of what happened with those 14 homes and if you are curious, we would be happy to discuss with you.

What that means for you: on the whole in this neighborhood you have a little better than a 50/50 shot of your house selling. It underscores the importance of finding a great agent to get the job done. 

supply of inventory

Months supply of inventory is an ever changing metric. These are current as of writing in late September. Please reach out for current stats if you would like.

 

Price Range

Months Supply of Inventory

Favors

Under $650,000

2.5

Seller

$650,000-999,999

7

Balanced/Buyer

$1-1.5 million

Less than 1

Seller

Over $1.5 million

Less than 1

Seller

About Months Supply of Inventory

  • 6 months of inventory traditionally represents a balanced market with as many buyers as sellers. Neither has a significant upper hand in negotiations.

  • Less than 6 months of inventory traditionally represents a seller’s market with more buyers looking than there are homes for. Generally, the seller’s have the upper hand in negotiations. The tighter (smaller) the inventory, the more likely multiple offers are at play.

  • More than 6 months of inventory traditionally represents a buyer’s market with more homes for sale then buyers to purchase them. 

As we move into the slower seasons of fall and winter, buyers usually have a slight upper hand than in the summer because there’s less buyers shopping. 

What this means for you: If you have a home in the $650,000-1 million range, you’re in good company. There’s a greater number of homes at that price range and they’re selling slower right now. Expect buyers to want to negotiate more and/or for it to take longer to sell your home than in the past. 

Fall 2018 Report Coming in early-mid December.