They say that numbers don’t lie and I like to believe that even though though they don’t always make as much sense as I want them too. The numbers from the first 10 weeks of 2013 don’t support what I think and what I think is that the market is very strong. So I went deeper and found what I was looking for. I found some numbers that speak to strength and not weakness. I will attempt to set the point up by starting with the 2012 story.

In the first 4 weeks of 2012 value shoppers drove the market as 50% of the volume was below the $600,000 price. As the inventory ran out below $600,000 the activity shifted to houses priced between $600,000 and $700,000 but the overall story of the first ten weeks of 2012 was that 65% of units sold in that time were priced under $700,000. That numbers spoke to weakness.

In 2013 the first 4 weeks were actually ahead with 17 units selling as compared to 13 in 2012. But in the next six week those numbers reversed dramatically with 36 units going under contract as compared to 12 units this year.

That was the number that confused me. Why such a bad year to year  comparison of units sold when I am feeling the market is strong. The reason for the bad number is simple. We ran out of inventory at the price point where our buyers were shopping.

Our buyers in 2013 were a totally different type of customer than in 2012. No more crazy low ball offers. No more ignoring the middle price point. Out of the gate we were right back in our wheelhouse, selling the nicer products for numbers that were way ahead of the previous year. But then we ran out of the type of inventory that they were interested in and everything stalled. I’ll go back to the numbers to help support this position. In the first 4 weeks of 2012  only 23% of the volume fell between $600,000 and $800,000. In 2013 that rose to 71%. 

That powerful indication of strength is impossible to ignore. We are low on inventory at the time of year when we are the busiest with sales . That  combination of low inventory and solid demand from qualified buyers is always a good thing for property values so things are looking up for sellers and property values. Now its just a matter of time. The next few months will tell more of this story and I will try to keep you posted. If you would like an Excel sheet with the data that I used for this entry, just shoot me an email and I will be happy to send you a copy.

Steve Freda

All numbers were pulled from 4 bedroom or greater sales

I don’t pay attention to the politics of the country, the interest rate or much of anything else that some other people do to help them develop their positions as to the relative condition of our real estate market here in Sea Isle City. But I do pay attention when owners start dropping in to the office and say hello or call me out of the blue in a volume that is more than normal. In the past month or so these seemingly random contacts have increased so much that I am shocked. The guy that sits next to me at work just keeps looking at me as I get all these visits and phone calls. He’s new at real estate and he keeps asking me what I have been doing to get all this activity. He wants me to tell him something but I have nothing the give him. The collective mindset is something I always think about. I am amazed at how it always presents itself in a sudden collective thought and then the action that is sometimes attached to it showing when it shows itself in my work life. People start thinking about taking action all at once and they go into a stall all at once. They start thinking conservatively or aggressively and they always do it at the same time without knowing each other or talking about it. Its like there is a special frequency out there that we are all tuned into without knowing it.

So anyway, the reason for me sharing this tidbit is just to let those of you that are getting antsy about what your doing with the Sea Isle position, your not the only one.