Uncertainty because it is difficult, if not impossible, to have a clear picture of the market. National and even regional news only report on the big picture. And while the big picture mat- ters to overall market confidence and conditions, to borrow from the old adage, all real estate is local. So what’s really going on in your neighborhood?
In order to provide the most accurate data, Walt Danley Realty has partnered with The Cromford Report, a market research and analysis firm. We zeroed in specifically on luxury homes in the Northeast Valley to get a clear picture of what’s happening here in town.
When looking at Cromford’s numbers it becomes apparent that the supply of luxury homes is still increasing but at a slower rate than in the previous two months. An increased inventory isn’t necessarily a bad thing, with the annual sales volume also seeing an increase over last year. Pending sales are lower than they were at the end of last year. Normally this wouldn’t be very encouraging, but it is a result of there being fewer sh
ort sales on the market which are tracked as pending – sometimes for months on end.
In other “Optimism, 2012” news, pricing for active listings is surprisingly robust with an increased price per square foot up 3.2% over last year. However, when looking at pending sales the price per square foot is down, and the annual average price per square foot is roughly the same as it was a year ago (with a slight uptick to close out the year). Before calling it a come- back I’d really like to see pending and sales prices increase along with active listing prices. One last spark of good news is the improved contract ratios seen in certain areas, especially Arcadia and the McCormick and Gainey Ranch areas. Contract ratios are the number of completed contracts compared to the number of active list- ings and is a good way to measure “what’s hot”. The slight dip across the luxury market last quarter is typical market activity over the summer and into fall. Compared to 2010 and especially 2008 and 2009, there is reason to be hopeful.
Long term, there are so many external variables effecting housing. As a major component of the ‘08 crash, the housing market’s machinations are continuously under the microscope for signs of recovery – with external variables perhaps having undue influence on people’s perception of things. The uncer- tainty of an election year can impact business investment and personal economic decisions, and this should not be over- looked when considering housing. November, while it may seem far in the future, will likely be a good indicator of what’s to come.
Hopefully this helped shed some light on the uncertainties in our market and provided a little peace of mind. If you would like further or more detailed analysis of your specific property, please call our office today.