Are numbers wrong, is it just an illusion? …or are the numbers just misunderstood?
As most of you who read my blog regularly know, I’m a market junkie. Never fails 1st and the 15th of the month I track the market stats. Over the years the stats have served me well as I could see swings in the market months before most. On the 1st, after sliding my glasses from my head to the bridge of my nose, I ran my set of numbers again. Here is what 4S Ranch looks like by the numbers:
A quick look indicated a little over a 2 month supply of homes available for sale. That’s representative of a good market. Pendings are holding at about 20 and inventory has dropped. But wait … it doesn’t feel like a good market with increasing prices. On the contrary, the market seems sluggish and I’m even seeing price reductions. Of the 11 homes sold in 4S Ranch in September 8 had price reductions. The average home was on the market 71 days and sold at 96% of the last reported list price. So what’s up with the graph? On a closer look at the inventory (homes available for sale) 44.7% are Short Sales however Short Sales only make up 9% of the homes sold. Of the pending listings short sales are almost 37% of the market and they are not closing, they are just sitting. In looking at a market, I normally felt the pending sales would close in 30 to 45 days and one may take 60 days however the short sales are taking 90, 120 days or more to close, if they eventually close at all. Now look at the typical arms-length-transaction here in 4S Ranch. They make up 37% of the inventory, 37% of the pending sales and a whopping 55% of the closed sales for the month. Prices are being driven down by the short sales which may or may not be able to close the deal. How should we view the numbers when short sales make up almost 45% of the inventory ~ any suggesions?