It's that time again to check in on the Pierce County Housing Market. This month we have another neutral month based on the year over year stats I always lead off with, but I also found a few goblins we may want to keep an eye on. Here are the headline numbers as measured on September 30:
Inventory – UP 6.5%
Closings – UP 9.1%
Median Price – UP 1.4%
New Pending Contracts – 31.7%
These are Year Over Year Numbers and they look pretty good. Inventory is UP, we like that, the market needs more houses to sell as we still have less than 4 months supply based on closed sales. Median Price is UP only slightly but that's not a surprise, we talked last month about price increases slowing. Pending contracts are UP so much that it is a great indication we are in store for a strong sales flow during the 4th quarter as we wrap up 2014! While I prefer the pumpkin is "half full" viewpoint, I have to say the market hasn't "felt" like these numbers. When talking with other brokers recently, I've noticed some chatter about a slower market; so I dug a little deeper.
Month Over Month transaction volumes are much different with Pierce County DOWN 13.4%. Turns out this August vs September drop in closed sales is normal, at least compared to 2013 when the same thing happened. However in arriving at this conclusion I viewed the volumes by price range and saw a couple of items you may find interesting. In the chart above you can see the very important $250,000 – $500,000 price range things really took a break with volume dropping 20%. These are the homes that buyers are "moving up to" and it is just this year we have been able to say the recovery took hold in this sector. This segment of the market represents over 35% of our Pierce County transaction volume. I don't know if it is widely understood that 95.7% of the Pierce County Market happens in this price sector….and below!
This shows that only 4.4% of all Pierce County transactions were over $500,000. In case you were wondering, listing inventory over $500,000 disproportionately makes up 13.3% of the total number of homes for sale. Pierce County Housing Market participants need to know, the "Work-Horse" price sector is under $250,000 with 41% of the inventory creating over 60% of the sales!
We have a healthy volume of Pending Sales so if history repeats itself the coming months should provide a nice increase as we wrap up 2014.
September's numbers are a fitting reminder that there's a limit to how robust our recovery can be characterized.
Month by month we are achieving normalization and as I've always said; "markets don't recover in a straight line" so there may be a bump in the road from time to time. Those that approach this market with realistic expectations based on detailed market analysis will find success.
Give me a call or shoot me an email, it is always good to hear from you!