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.
All numbers were pulled from 4 bedroom or greater sales