The second quarter of 2016 continued the strong upward trend in year over year sales volume we’ve seen since Q2 2015. Single family home sales in Sullivan County were up 16% over the second quarter of 2015. That may not seem as dramatic as the 30% or 40% year over year quarterly jumps clocked in the past year, but looking back two years, the 2nd quarter increase from 2014 to 2016 is 48%.
The price side is also showing a pick up. The 2016 2nd quarter average sales price was up 10.7% over 2015, to $146,852, while the median rose 17.6% to $100,000. Closed sales prices during the second quarter tend to be the lowest of the year because of a larger proportion of investor and primary home purchases rather than second home purchases during the winter selling season.
Contributing to the increase in the average sales price is stronger performance at the upper end. During the second quarter of 2016, there were 6 sales closed over $500,000 here (including 1 sales over $1M), compared to only 2 during the same quarter in 2015 (with no $1M+ sale.) While the upper end is still soft compared to more moderate price segments, it is showing more life.
The bid/ask ratio during 2Q2016 was 92.8%, a sharp jump from the 90% bid/ask the previous quarter and the highest I’ve seen in a couple of years.
|4/1/2015 – 6/30/2015
|4/1/2016 – 6/30/2016
|1/1/2016 – 3/30/2016
|2010 – Full Year||485||$160,589||$139,900|
|2011 – Full Year||472||$164,345||$138,000|
|2012 – Full Year||476||$150,939||$134,000|
|2013 – Full Year||569||$155,589||$124,000|
|2014 – Full Year||580||$165,298||$125,000|
|2015 – Full Year||699||$143,874||$117,500|
The summer market has been very strong. One indicator is the number of properties marked as “pending/in contract” in the Sullivan MLS. Over the past few years, the number of pending sales has ranged from 140 to 150 during the off season to around 190 – 195 during the peak fall season. This year, that number passed 200 in early June and has been hovering in the 220’s since then. That’s a pretty remarkable increase and indicates that houses are going into deals. On a more anecdotal note, of the six offers I handled from July to early August, three of them ended up in multiple bid situations.
The hottest categories I’m seeing among second home buyers are farmhouses/country charmers on acreage under $400K and moderate priced lakefront houses in the $300’s. Both categories are literally ‘sold out’, and some properties in these categories moving within a week or two of being listed.
(Aug 2016 Sullivan MLS)
Sullivan & HGMLS
2nd Qtr 2016
|All single family homes||$253,521||$169,999||$146,852||$100,000|
|Non-lakefront, 10+ acres||$408,334||$299,499||$411,041||$341,250|
Sellers and inventory
The number of single family homes listed for sale in the Sullivan MLS in mid August 2016, 1,084, is down 8.3% from the 1,181 houses on market at the same time a year ago. That may not seem like a big deal, but combine that with demand being up by probably 15-20%, and you can see that there’s a big squeeze on the available inventory.
We’re starting to see a jump in the average asking price, with the average ask in the Sullivan MLS in August, 2016, $253,521, up 3.6% from the previous year. That’s not a big jump, but does indicate strengthening seller confidence.
Sellers, however, should be cautious about assuming that the market has shifted from a buyers’ market to a sellers’ market across the board. In some categories, the scape has tipped, but not in others. The market for farmhouses under $400K is hot, but over $500K, it’s cool. Likewise, rustic “On Golden Pond” lakefront is hot, but more ‘suburban’ style lakefront, not so hot.
Sellers also need to keep in mind that the lending environment is still very conservative, and that’s tempering price appreciation. A property appraising for less than the deal price is probably the number one reason that deals fall apart here. Sellers need to keep an eye on the likely appraisal range for a house when setting a price.
The outlook heading into fall
There are no signs that the real estate market in Sullivan County is going to slow heading into fall. The big question mark is whether there will be sufficient inventory in key segments to meet demand. Tight inventory is throttling the market.
I expect demand to continue to be price and segment related. Sullivan County is primarily a middle class second home market, so the strongest demand will continue to be in the affordable to moderate ranges. While there is a little more tire kicking at the upper end, I expect demand to remain sluggish above $500,000.