Here’s another way of looking at both what’s selling and for sale. Usually, I report on average and median home prices. But since people buy homes in certain price ranges, I’ve broken out first half sales and inventory by price category. Most of the sales and inventory are under $1.5 million. As the prices go up, the number of sales diminish and the month’s supply of inventory increases.
Average sales price for the coast for the first half of this year was $1,460,000, up 8 percent from first half in 2019 and up 9 percent from full year 2019. Median price was $1,325,000. Sales volume for this period is down 12 percent from last year (see my column dated July 17, 2020) and down 20 percent from the first half of 2018.
Two-thirds of all sales this half were under $1.5 million with almost half in the $1 million to $1.5 million range. There were very few homes sales under $750,000 accounting for 6 percent of total sales and similar to percent in 2019.
One-third of sales this year were above $1.5 million with 10 percent over $2 million. In 2019, percent of sales were similar to now.
What needs to be looked at also is inventory levels by price and particularly what’s available and sale-pending. To see how fast or slow things are selling in any price category, you want to look at month’s supply of inventory. To calculate this, divide first half sales for any price category by six and then take particular inventory level and divide by that number.
The softest part of the market here is over $2 million. And with the high level of inventory in this category in relation to sales, these homes are going to be on the market a longer time. There were 11 sales this half and there are 24 listings (with six being sale-pending) so there is 13 months’ supply of these homes!
In the sweet spot of the market ($750,000-$1.5 million), things are better. Inventory is down to three months’ supply with half being sale-pending.
Now there’s good news for both buyers and sellers with low inventory levels, low interest rates and an improving stock market. For the third quarter, you can expect inventory to increase as it historically does and interest rates to remain low. While I feel prices will remain near current levels, the ongoing pandemic is the unknown factor.
This chart shows total inventory and sales for 2019 and 2018 by price category.
Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at 726-6346 or at century21sunset.com