September sales numbers hit a plateau- let’s hope it’s not a ceiling
While still in line with recent months, sales stats last month show no remarkable changes overall.
The liquidation speed of housing inventory had been climbing during the past quarter, but actually slowed down for the first time since May. However, at 7.4 months, this number is still lower than September of last year, when inventory took over 8 months to sell.
We are facing an increasingly tightening market in terms of inventory. In September of 2013, home buyers had 2,464 homes on the market to choose from. Exactly a year later, the market is only offering 2,177, a decrease of almost 12%. The percentage decrease from October 2012 is roughly 30%.
As a result of shrinking inventory, the number of monthly sales were also the lowest from the quarter, dipping below 300 for the first time since May. Seasonal cycles are largely the culprit though- last month’s 294 sales were comparable to September 2013’s figure of 305 sales.
The selling prices were a little more promising but did not show much movement. The sold-to-list ratio averaged 95.55%, up about a tenth of a percentage from August. The median sold price remained steady at $403,000. This figure was up 5% from last month, but down 3% from September 2013.
The lack of available inventory can be explained by economic factors. Following a recession of several years with very slow recovery, homeowners are reluctant to take the risk of selling their homes. Back in 2010 at the height of the recession, 3,110 homes were available on the local market, a full 30% more than available inventory this month. During that time, homeowners were scrambling under the pressure of loans they easily obtained and could not afford. At the time, short sales and foreclosures hit a peak, forcing owners to sell quickly before the damage got worse.
Those who weathered the recession are now timid to take that leap. The market fluctuations make homeowners nervous to list their homes because of unpredictability. And since this mindset is prevalent among homeowners, those who may be on the fence about moving are hesitant about taking the next step because of how little is available. Thus, our real estate market during the span of four years has moved from a “crisis” mindset to that of “caution.”
The Conference Board’s Consumer Confidence Index also declined in September. Falling to 86.0, this was a significant decrease from August when the index was 93.4. According to Lynn Franco, director of The Conference Board, consumers in the United States are discouraged with sluggish job growth. Mirroring the trend for the number of monthly home sales, consumer confidence rose four straight months in a row before falling in September.