The final quarter of 2011 closed out the year on an up note, with both the median and average sales prices showing sharp gains over the same period a year earlier. The average single family closed sales price for the 4th quarter of 2011 was up 12% from the 4th quarter of 2010, while the median sales price clocked a 20% jump. Year over year volume, on the other hand, was flat. That's actually good news, that we haven't seen a drop in volume. But given the uncertainty about gas drilling in the western part of Sullivan that has hung over the market all year, I think sales performane was pretty good.
The rise in the year over year average can be attributed somewhat to two $1.5 million sales at the Chapin Estate that closed in November, 2011. The median sales price, on the other hand, is much less sensitive to large individual sales, so the jump in the median is more reflective of an overall upward trend in prices. However, the 20% rise in the median should not be viewed as reflecting a 20% increase in individual home prices. Rather, there seems to have been a shift from down and dirty bargain hunting that was driving the market a year ago, to buyers looking for houses in better settings and better condition at slightly higher price points.
Now that 2011 is closed, I also pulled full year sales data for 2010 and 2011 (included in the price table at left). The full year picture is flat, in terms of both volume and price. Prices bottomed out during the 1st quarter of 2011, with the median sales price hitting $115,000 in January, 2011, the lowest I've recorded here since July, 2003. But starting in the second quarter, prices have been steadily if modestly trending up.
For the latest three month period, houses here sold for an average of 88% of their asking price, and 78.2% of their original asking prices.
The Current Market
December is always a wash out month, in terms of buyer interest and home shopping, and this past December was no exception. Between Thanksgiving and New Years, most people are thinking holidays, not houses. Starting in early January, there's been a nice pick up in inquiries and appointments.
What's hot? Lakefront houses priced at $300,000 or below is the top request I'm fielding. It's a tough order to fill, though, as the inventory of lake houses in the sub-$300,000 range is very limited, and the available houses are either quite small or have less-than-ideal lake frontage. There are also quite a few buyers looking in the $300K to $400K range for lake properties, but selection in that range is also limited.
The other hot property category right now is hunting cabins on 20 or more acres. There are a number of good options in that category on the market here at the moment, but in a price range generally from $200K to $300K, while the buyers who have been calling are generally looking sub-$150K, so it's been tough to make a match.
The demographic profile of buyers I've been working with recently has been very diverse. There's the core of 30-something young professional couples from Manhattan and Brooklyn, generally looking for a charming getaway in a nice setting (with privacy or lake) at an affordable price point. But lately I've gotten a lot of inquiries from buyers from Long Island, who are a bit older and looking for larger places suitable for family sized gatherings. Then there's the sportmen group, from roughly 30 to 50, looking for recreational acreage, with or without a house. Notably, what I haven't seen much of recently, are financial services types from the city laden with year end bonuses looking for upper end trophy properties.
Sellers, Asking Prices and the Inventory Picture
At the beginning of January, the average asking of houses on the market here was $231,481, just about on par with the average asking price at the beginning of December. The average asking price is down 9.2% from the same period a year earlier. Sellers have definitely been getting the messsage that price is the driving factor in generating buyer interest. However, there is still a wide gap between seller and buyer price expectations, but it is narrowing. In terms of inventory, there were 918 single family homes listed for sale in the Sullivan County MLS at the beginning of January 2012, 7% less than at the beginning of January, 2011.
Limited inventory, particularly of moderately priced lakefront homes and well situated charmers with privacy, is putting a drag on the market. Sellers commonly think that there's little point to having their houses on the market during the winter, but winter tends to be a fairy robust selling season. This could actually be a good time to put a house on the market, if it's well priced and in a market segment, like lakefront, where there is more demand than supply. Buyers shopping during the first quarter of the year tend to be quite motivated, as they want to be in a house for the summer.
What Does This Mean for You as a Buyer?
Winter tends to be a good time, in terms of making a good deal. Most of the inventory has been on the market last last summer or fall, and has had time to 'season' so that the sellers are primed to make a deal. However, mid winter inventory is more limited, so there's less selection. Buyers should be prepared to be flexible in terms of their ideal.
Be prepared to move quickly if you're hoping to grab a 'deal'. When houses hit that sweet spot, price wise, when sellers have thrown in the towel and priced them to move, they're getting action. Over the past couple of months, I've worked with a number of clients who've seen a 'great deal' house, but decided to keep looking for something that might be a little more perfect. When they come back a month or two later to make an offer on that 'great deal' house, they're often shocked that it's gone. But great deal houses are moving, particularly at moderate price points.
Look for seller fatigue. That's where you'll likely find the best deals. Prime suspects for a great deal are houses that have been on the market for at least a year, and recently have had one or more substantial price reductions. Houses that have just come on the market may have to ripen a while before the sellers are ready to deal.
Houses sell here, on average, for about 88 to 90% of their asking prices. There's a subset of buyers that have a 50% mentality — when they see a house they like, they put in an offer of 50% or maybe 60% of the asking price. That seldom works. A seller with a house listed at $400,000 is highly unlikely to do a deal at $250,000 or even $300,000. At $400,000, that house may well be overpriced given the market. But until they lower the asking price to under $350,000, a deal at $300,000 is probably not in the cards.
Archived Sullivan County Real Estate Market Conditions Reports
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Note on Methodology Change: For close to ten years now, I've been using sales data from the Sullivan Multiple Listing system as my sole data source for residential real estate sales in Sullivan County. There have been small number of sales in Sullivan through the neighboring MLSs, but the impact of sales here not included in the Sullivan MLS has been small. Over the past year that has changed, as more properties in Sullivan are being listed by out of county brokers (who do not participate in the Sullivan MLS), and some Sullivan brokers have ended their Sullivan MLS participation and are only participating in the neighboring Greater Hudson MLS (GHVMLS). When I total Sullivan County single family sales from both the Sullivan MLS and GHVMLS, I was shocked to find that 26% of the 487 MLS listed single family sales in Sullivan in 2010 were not reported in the Sullivan MLS, only in GHVMLS. So, starting with the March 2011 report, I've merged the sales data from both systems to provide a more accurate picture. To enable accurate year over year comparsions, I've merged the data for the past 15 months. (The overall trendlines you see in the yearly chart, which includes both SCMLS and GHVMLS data, does not differ markedly from the same chart with the GHVMLS data excluded.) But there will be some discrepencies between current data and what's included in archived reports, which are based only on Sullivan MLS data. Also, information on current listing inventory and prices will continue to be pulled only from the Sullivan MLS as there's no practical way for me to create a merged snapshot of available inventory from the two systems. Lastly, I'll no longer be able to split out the percentage of bank owned foreclosure sales, as that is not coded in GHVMLS listings |
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