Closing data for the month of May was impacted by the expiration of the home buyer tax incentives at the end of April. The month of June should also have positive closing data. Based upon my analysis of various indicators, I can make the following statements regarding the residential market;
May closings of detached housing were up 37%, townhouse closings were up 8% and condo closings were up 57% compared to May of last year. May inventory increased 4% and based upon closings during the past 6 months there is a 5 month supply.
The average sales price of a detached house dropped 5% to $271,600. The average sales price of a re-sale was just under 1% higher at $233,800. The average sales price for all housing types dropped 3% to $244,800.
Average list prices dropped across the board. The overall average dropped 10.5% to $322,000, the average list of a new home dropped 13% to $377,000 and the average list of a re-sale dropped 7% to $309,500.
Declining house prices continue to eat away at home equity. Re-sale sellers within the past 13 months who previously purchased in 2007, 2008 or 2009 all sold for less on average. Those who purchased in 2006 are barely above 0%. The graph on page 3 shows the erosion of home equity. Analysis of paired sales from a closing or listing standpoint continues to indicate that 2007 was the peak of the market in terms of prices. Both the listing and historic appreciation rates were at their highest during May of 2007. To illustrate how far the market has fallen, the average seller in May of 2007 had their house listed at 6.97% per year above prior purchase. Current sellers have their house listed at 3.43% above prior purchase. That is more than a 50% decrease in rate.
Housing located in the combined areas of Cary, Apex and Morrisville continue to outsell compared to other geographic areas within the county. This combined area also has the lowest current supply at 4 months.
There are 13 price points/geographic areas that have a current supply of housing at 3 months or less. The majority of these buckets are priced below $300,000. There are 20 price points geographic areas with a current supply of housing at 10 months or higher. Five of these buckets contain housing priced at 1 million and above.
While May deed transfers were 26% above May of 2009 transfers, they were the second lowest amount during the past 11 years.
Looking at the market in 90 day segments provides some additional metrics.
The median sales price during the past 90 days was 3% above the median seen during the same period in 2009. The median sales price per square foot was up 0.36%. Both of these metrics are positive and indicate that house prices have stabilized coming off the lows seen in 2009.
Re-sale inventory has increased 19% and new home inventory has decreased 24%. Both of these are a continuance of trends started in 2009. Based upon the prior 90 days of closings, there is an 8 month supply of re-sale housing and a 6 month supply of new homes.
Of the +/-1,700 new homes on the market in Wake County, 68% of them are framed, meaning that 32% are “shadow” listings. This high percentage is indicative of the tight credit market for spec housing.
