Here’s another way of looking at both what’s selling and for sale in the local real estate market. 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 supply of inventory increases.
Average sales price for the coast for the first half of this year was $1,351,000, up 1 percent from first half in 2018 and up 2 percent for full year 2018. Sales volume for this period is down 7 percent from last year. (See my column dated July 17,2019.)
Two-thirds of all sales this half of the year were under $1.5 million with the bulk being in the $750,000 to $1.5 million range. There were very few home sales under $750,000, accounting for just 7 percent of total sales. Sales in 2018 pretty much mirrored 2019 sales with 62 percent of all sales under $1.5 million with a few more sales under $750,000.
One-third of sales this year were above $1.5 million with 10 percent over $2 million. In 2018, sales were similar with approximately a quarter of sales over $1.5 million with 8 percent of sales topping $2 million.
Inventory levels by price and particularly looking at what’s available and sale-pending can be useful. To see how fast or slow things are selling in any price category, you want to look at months’ supply of inventory. To calculate this, divide first-half sales by six and them take total inventory for a price range and then divide it by one-sixth of the sales.
The softest part of the market here is what’s available for more than $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 long time. There were 12 such sales this half and there are 26 listings (with only two currently pending sale) so there are 13 months’ worth of supply in this category.
In the sweet spot of the market ($750,000-$1.5 million), things are better. Inventory is down to 3.6 months’ supply. But here, too, we see softness in that 44 percent of all the inventory in this price range is available.
Right now, the market seems to be favoring the buyers with high inventory levels, low interest rates and a strong stock market. That trend should continue through the third quarter as inventory traditionally increases to the highest levels of the year.
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 www.century21sunset.com