What Is Selling in Today's Market?

SteveBerg05.jpgAfter reading Kris’ “Showing Activity” stat’s Blog it motivated me to go in a slightly different direction. We can drive ourselves crazy with statistics, but once in a while we need to dig in further to better understand market dynamics and to advise our clients. Of course, whatever we discover as a “trend” today may be different tomorrow. But we have to rely upon as much quantifiable data as we can. So with that said, I just spent the past 2 hours swimming in year-to-date statistics for Scripps Ranch and here is a summary of what I found (Note: All sales stat’s are derived from SANDICOR from 1/1/06 through 5/17/06 for Zip Code 92131):

Total # of homes sold = 114

   Size      # of Sales   Avg. Price/$ per s.f.   % of Total Sales

< 2,000 s.f.        48        $621,000/$382         42% 2,000-2,999 s.f.  50       $809,000/$334          44% 3,000-4,000 s.f.  11       $994,000/$302          9.6% >4,000 s.f.          5        $1.3 mil./$278           4.4%

So what does all this jibberish mean? One interesting item is to look at what happens to the “sales price per s.f.” in the different home size segments (about a 10% diff. per each size category).

Also, an overwhelming 86% of all homes sold were under 3,000 s.f. This is no surprise based upon what we have been seeing in the market place. But for this to be a more meaningful stat, let’s look at the current breakdown of active listings:

  Size       # Listings    % of Total    Avg. List Price/$ per s.f.

<2,000 s.f.         33        23.4%       $621,000/$404 2,000-2,999 s.f.  56        40%          $841,000/$348 3,000-4,000 s.f.  43        30.5%       $1.17 mil./$345 >4,000 s.f.          9         6.4%         $1.47 mil./$330

There are several important issues (aka, Disconnect’s) revealed by these stat’s: 

DISCONNECT #1 – At the moment, there is an imbalance between the Supply (number of listings/sellers – too many) and Demand (buyers – too few) in the over 3,000 s.f. category. Based upon the absorption rate of the first 4.5 months of the year, something’s got to give!

DISCONNECT #2 – Look at the relationship between List Price per s.f.. vs. Sale Price per s.f.  For homes under 3,000 s.f., there is a relatively close relationship (within 5% difference). But look at the variance for homes over 3,000 s.f. (13% to 16% difference). This does not even consider price reductions that occurred prior to the actual sale, which would result in an even greater variance. 

It would appear that the perception of “value” between buyers and sellers is still too far apart, particularly in the larger, more expensive homes.

Okay, okay, we all knew this, right? But now, it’s quantified.

You may infer or even conclude other revealing things from all of these numbers, but since my head is about to explode, I will leave the rest for you to figure out. 

I welcome your comments! 

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