We have all been looking for positive signs that the economy has changed enough to feel better about our property values. Well, the 1st Quarter may have brought that to us.
The enclosed chart shows the sales history for 2009 vs 2010. During the 1st Quarter of 2009, only 8 properties were sold compared to 20 properties in 2010.
The size of the units sold in 2010 represents about a 10% increase in size, and an equal increase in average sale price.
An encouraging fact is that properties are selling at closer to the original asking price.
To be sure, some of the property sold represents foreclosures, short sales, or other repressed pricing from prior years. These sales are a necessary part of an “inventory clearance” process, not unlike what you might find in a department store at the end of a season. The sooner these properties are gone, the sooner we can return to a normal selling environment.
The good news is that Buyers are returning to the market. I have had a significant uptick in showings on my listings, even those listings that are labeled either contingent or conditional! This is also reflective of Sellers taking an aggressive view of the value of their property based on the current market conditions. The chart above shows that Sellers are getting 95% of their asking price, while the average $ per square foot has gone down. Clearly this is a market driven change. This market condition will not assume the same type of 6%—8% appreciation of prior years.