June 2017 Single Family Residential (SFR) closed sales were up 4.3% from May and 12.3% better than June 2016. Year to date 2017 closed sales are now up nearly 11% over 2016. The median closed sales price of a SFR edged up 3.4% from $250,000 to $258,500 while the average closed sales price of an SFR remained flat at $296,080. Residential resale activity was brisk again in June leaving us with approximately 1.5 months of inventory. SFR closings, Condos/Townhome closings, Hi-Rise sales closings and Luxury Sales closings continued to make gains as well.
So what does it mean when the median price posts significant improvement while the average sales prices remain flat. Simply, we are selling more homes at higher prices, but in those higher price ranges – the sales are closing a slightly lower prices. This could be the result of squeezing out the over pricing or lower than expected appraisals. Either way 50% of the units closed in June were at prices above $258,500. The charts below also show that 65% of the SFR units closed in October 2016 were below $250,000. However, as of this month only 55% of the Greater Las Vegas closings are below $250,000. That can be seen in better detail by reviewing the “Closed Units by Price Point” charts below.
Over Pricing Index
There were 3675 SFR closings this past month. The average Days on Market (DOM) for all SFR closings was 36 days, but check this out:
- 2535 SFR closings (69%) were 30 days or less
- 2199 SFR closings (60%) were 20 days or less
- 1632 SFR closings (44%) were 10 days or less
Over Pricing Fun Facts:
There are currently thirteen available SFR listings that have been actively on the market for over 1000 days, with the longest one being over 1500 days. One has been on the market since April 2014 with Public Remarks as follows: “. . . Hurry it won’t last in this market . . .” And guess what? Yes, that’s right – the current listing price is the same price it was listed at over 1100 das ago. Let’s see! April 2014? That was two real estate license renewal periods ago for me! LOL
Another one listed earlier in 2014 states: ” . . . Seller is looking for offers . . .” Certainly, this seller is still looking!
The chart below shows that Over Pricing is steady with 61% of all available Single Family Residential listings being over priced. That means that only about 2100 of the available 5400 SFR homes are priced correctly. In short, there is less than 3 weeks of marketable inventory. Is this leading to multiple offers, especially in the price range below $300,000? Of course it is! So consider . . .
Know the New Home Community Inventory
First, with 61% of the six weeks of SFR inventory over priced – we are left with about 15 days of marketable inventory in residential resale inventory. Thus be sure to preview the various new home communities in the areas you normally market or where you buyers are looking. There is some standing inventory, but even that is going quickly. A couple of new home communities are nearly sold out after being open for only one week. Still, a new home purchase may be a great alternative for you buyer who keeps losing multiple offers in an overheated resale market. Keep in mind that if a builder is sitting on completed inventory, they are motivated to move those homes so they can build more. You might even find excellent incentives there for your buyers. Besides, many buyers are going to new home communities with or without you due to current market conditions and even frustration over the residential resale market conditions.
We all know that having our buyers pre-approved is far better than having them just pre-qualified. However, some lenders are able to have your buyer underwritten pre-approved. That means they have completed all paperwork and submitted all required documents even before identifying the home they plan to purchase. The only things they are waiting for at this point is a contract, inspections, appraisal and insurances for the most part. The underwritten pre-approval should be signed by the underwriter and this could save a couple of weeks in the loan process. Under the theory that sometimes “we need to slow down to speed up”, this just might provide your buyer a solid advantage in a competitive, multiple offer situation!