Local real estate sales continue an upward trend

By on November 19, 2012

Real estate sales for 2012 have continued an upward swing, even over the summer months, according to the October MLS Statistical Report compiled by the Outer Banks Association of REALTORS.

Summer is usually a slow period on the Outer Banks, unlike other areas where sales pickup as people change locations while school is out.

The bulk of the area’s sales are rental homes. Those tend to sell during the fall and winter when they are vacant for showing. Owners typically like to collect summer rents before selling an investment house.

According to the OBAR summary, total sales year-to-date through October were up 21 percent over the same time period in 2011 — 1,733 units vs. 1,429 units.

Residential sales increased 16 percent, 1,344 units vs. 1,157; land was up 48 percent, 368 units vs. 248); while commercial was basically flat , 21 units vs. 24 in 2011.

The year-to-date increases for properties under contract were even more dramatic. Overall, 1,913 units were under contract by the end of October, a 22 percent increase over 2011.

Residential units under contract increased 20 percent, while lots under contract were up 40 percent.

The most active price range continues to be residential properties from $200,000 to $299,000, with 372 units sold with an average marketing time of 207 days.

In spite of reports on the difficulty for borrowers finding loans for high-priced investment properties, 249 priced $500,000 and over have sold so far in 2012, including 50 with price tags over $1 million.

Foreclosure filings appear to be dropping. Likewise, distressed property sales as a percentage of total sales comprised only 26 percent of residential sales in October.

The above two figures would be welcome news for the real estate market if the trends continue. Foreclosures add to inventory, and coupled with distressed properties, they exert downward pressure on sales prices.

The average sale price for 2012 is $359,141, a 2 percent decrease over 2011. The average price of land has decreased only 1 percent over 2011, while commercial has experienced a 1 percent increase.

The absorption rate, which is the amount of time it would take to sell all inventory at the current pace of sales, is down to just over 58 weeks. In January 2009 that figure stood at a disturbing 241 weeks.

For those sitting on the sidelines waiting for further price reductions, the foreclosure and price decline data appear to indicate the market has hit bottom.

Translation: With historically low interest rates, inventory declines and stabilizing prices, this winter may prove the last chance for buyers to close before prices and interest rates begin to climb.

In terms of dollars and cents, the market this year has generated $539.9 million in sales, compared to $468.5 million for the same period in 2011. This marks a 15 percent increase in sales dollars, which means commission increases for local Realtors.

For local residents, the “multiplier effect” of those rising commission salaries helps the entire economy.


Top: Total sales, Line 2: Residential, Red: Land, Green: Commercial.
 

Bookmark and Share


Comments

EyeOnTheMarket

November 20, 2012 9:13 am

In 2009, I was at a building contractor’s brunch put on by Lowes up in Northern Virginia. At that meeting, I met the owner of one of the larger firms that Lowes buys all of their engineered lumber from (trusses, etc.). This was about a year after the market crashed.

This gentleman told me that their firm spent about $200k on a study with the main intent of the study being how to forecast when the market will start rebounding and how they could be ready for it.

Their research showed the spring of 2013 in to 2014 would be a fairly significant rebound. There were 3 main trends that the research showed:
1. The number of college grads vs. the number of available houses between ’09 and ’13 would spike the demand.
2. The bottom of the market would have been reached in early ’11 or ’12.
3. The amount of personal savings would have increased by this time for people that did have jobs – enough to raise the consumer confidence index – for people to start spending money on real-estate, etc.

I have watched the markets, the trends, and the facts that this person presented back in ’09 with amazement because he was right on target with every point their research returned.

I’m not buying the whole “fiscal cliff” philosophy either – I’m up in DC right now and the movers and shakers are gonna get the job done, I’m seeing/hearing the signs. Might not be on that date but soon.

We are definitely on the upswing and things are already getting better in OBX and outlying communities. Keep a happy face, keep your head down and keep working hard and saving, spend frugally, and we’ll get there soon.

And for the Love of God: when the market comes back, don’t hock your frickin’ house and buy a shiny new boat with money you ain’t got!

Happy Thanksgiving everyone!

Salvo Jimmy

November 20, 2012 6:02 am

10-4, thanks

Jon

November 19, 2012 10:11 pm

Salvo Jimmy, here is the link to the full report, scroll to pg. 15:

http://outerbanksrealtors.com/cms/bm~doc/oct12totalpropertyreport.pdf

Salvo Jimmy

November 19, 2012 4:35 pm

Would be good to see how just Hatteras Island compares to this overall county look.

Join the discussion:

You must login to post a comment.

Not registered? Create an account.