You would think that the number of homes sold would be the key matrix used in judging whether a real estate market was healthy or not. Although sales are a component and very necessary part of the over-all picture, there are other things we need to look at when judging the health of a market.
Why is all of this important? The health of a market will be reflected in the home values, sold prices and the rate of sales. Fortunately for the Crystal Coast real estate market we are currently seeing is the healthiest market for the past 10 years!
This area has never been able to successfully handle more than 900-1,000 homes for sale at any given moment. Above this mark the market place starts to glut. Below that amount and we see a complete turnover of inventory every 4-6 months. That is what is considered a normal and stable market and is what we want to see.
Currently the Crystal Coast has a little bit over 1,700 homes on the market for sale. That’s way above where we would like it to be but still the lowest (and best) level in 10 years. As inventory goes down the healthier the market.
Speaking of which, let’s look at the inventory levels when we factor in the rate of sales. It’s called the absorption rate and is probably the single best indicator of a real estate market place. Currently our area has an absorption rate, (sometimes called supply of inventory) at 12 months. That’s the best supply of homes we’ve had since 2006. Back then it was down to 7 months. 2009 was our worst year over the past decade with a whopping 23 month supply of homes.
Remember, a 4-6 month supply of homes is considered normal and stable. Although we are at twice that amount we are still half as much as what it was just a few years ago. Things are getting better.
As a side note, all real estate is local. While the Crystal Coast has worked its inventory problems down to a 12 month supply, the nation is enjoying levels half of that.
The average sold price of a home along the Crystal Coast is $227K. That’s been fairly consistent for about 4-5 years now. The big spike in price was 2007 when the average sold price was $296K. The lowest was 2011 at $198K.
With a 12 month supply of homes sellers need to think about the following. If all things are equal between your home and the competition, then expect your home to take about 12 months to sell.
This is still a buyer’s market. We have about a 2 to 1 ratio of homes coming on market for sale and homes going off market as sold. For every 2 new homes coming on market, 1 existing home gets sold. This is what causes the glut of inventory and more options for the buyer.
There is some good news for some having a difficult time getting a good FICO score. The Wall Street Journal reports that for those with little or no credit history, FICO was started to look at credit history including paying cable bills, cell phone, electric, water, etc. This is expected to impact and help some 15 million Americans nationwide to obtain better credit scores.
Contact Margaret Hitchcock for more information about real estate along the Crystal Coast, Havelock or the Historic New Bern area.