The expression “a week is a long time in politics” would seem to have a corollary within the real estate market “3 months can change a market” – not quite as much of a call to action, however such has been the change in the local property market since the summer, I feel drawn to make such a statement.
I’m referring to the availability of properties for sale. Back in late February, there was, as I described at the time an abundance of options for buyers. I used the phrase ‘the market is awash with properties for sale’. At that time there were 79 properties for sale, a month later it has risen to peak at 83. Since then, the market has been devoid of new listings, just 31 new properties in 10 weeks. The same 10-week period last year saw 56 properties listed. This lack of new listings has led to a significant decline in inventory, such that there are now just 56 properties on the market for sale, not far off the level at this time last year.
Overall Market Summary
This swing in market sentiment is yet to flow through to sales volumes. Sales of 48 properties in the past 3 months represents a decline compared to last year, however the first indication of price pressure can be seen. The median sales price of houses rose by 1% to $1.9m in the 3 months to May, recovering some of the loses of the past 9 months.
The data for the sales of houses in the past 3 months (March / April / May) indicates a strengthening in sales prices, with a rise of 1% over the past year to $1.9m as the median sales price over the past 3 months. As the chart below highlights the median sales price has been recovering gradually since August last year when prices reached a bottom at $1.54m following a 3 month fall from $1,890,00 which was the level 12 months ago.
The tracking of the year-on-year change detailed in the chart below for both volume sales and median sale price, shows this recovering in sales prices. At the same time the year-on-year performance of sales continues to show a decline as compared to this time last year. This is the nature of statistics, at this time last year sales volumes were still healthy. The change in the market began in the winter months of June and July last year with prices falling a few months later. It is likely that the next months report will begin to show strengthening in sales volumes of houses.
Having reported that house sales volumes are languishing as a function of strong performance at this time last year, the sale performance of units is reacting to sales measured against a very weak level a year ago resulting in this unexpected spike. Units sales volumes, even when measured on a 3 months basis are still small and therefore year-on-year variances of 50% are possible and not the result of massive sales. For March / April / May period this year total sales volumes were just 4.
The median sales price remains fairly static, hovering around the level of $750,000, a level pretty much the same (save for a few blips) over the past 2 years. The improvement in sales volumes and listings though could portend to a rising interest in this segment of the market.