Before beginning to compare the four week period ending 21 September 2006 to the corresponding 2005 period, let’s quickly do a different comparison. Let’s compare figures for two consecutive 12 month periods:
| Period: | Total Listings | Total Sales |
|---|---|---|
| 22 Sep 2004 to 21 Sep 2005 | 4,649 | 3,518 |
| 22 Sep 2005 to 21 Sep 2006 | 5,286 | 3,238 |
If there was any doubt that the market for single family homes has been slowing, these figures should remove that doubt! While home sales are down by only by less than one percent year to year, the ratio of sales to listings has changed much more dramatically. During the most recent 12 month period, there were about 6 sales for every 10 homes listed. During the earlier
12 month period, that figure was closer to 7.6 sales for each 10 homes listed.
Interestingly, the sales to listings ratios moved in the same direction (downward) across all price ranges. Also interestingly, the movement was smallest, around 5%, for the lowest price range (under $400K and at the highest price range (over $1M).
Another story that falls out of the 12 month comparison relates to homes listed for less than $400K. The number of listings in that range is down by a whopping 37%, year to year. That seems to be a natural result of the increase in average price that took place over the same period. The availability of homes to buy in all other price ranges increased, year to year.
Now, back to the usual four week comparisons.
| Period: | Listings | Sales | Days on Market |
|---|---|---|---|
| 25 Aug to 21 Sep 2006 | 410 | 205 | 48 |
| 25 Aug to 21 Sep 2005 | 416 | 262 | 32 |
The listings to sales ratio for this four week period slipped from 63% in ‘05 to 50% this year. This is certainly consistent with the year over year figures, as well as with the slow down in sales velocity: 48 days in the past four weeks vs 32 days in the corresponding period a year earlier.
The overall slowdown is likely also reflected by the decline in the number of homes that sold for more than the original list price in the last four weeks (11) vs the earlier period (29). Nevertheless, homes in this category sold quickly in both years, averaging 12 days on the market last year and 15 in the past four weeks.
Overall, the average gap between original list price and the eventual sales price increased somewhat: during the four week period last year it was about $18K; recently, it was about $31K. At the same time, the period to period average selling price was up about $53K but as ever, don’t pay much attention to prices in any four week period – the numbers of sales simply are too low to provide a reliable market indicator.
Summary
The four week comparison is consistent with the 12 month comparison. Both indicate the market for single family homes has cooled somewhat, with more inventory, fewer sales, and slower sales velocity.
Thanks for tuning in. Next week it’s back to the condo market.
Bye for now,
...Victoria's blogging real estate professional.
