For better or worse, 2011 is in the books. Let’s look at the year according to the numbers:
- New listings are down which tells me that more people opted to stay put or rent their home in 2011. The rental market has skyrocketed in the past year which is consistent with that trend.
- Pending and Closed sales were both down due to several factors. In 2011 we faced a tough lending market which made it difficult to get to the closing table. There is one bright spot in the closed sales number however. When you compare the percentage of listed homes that sold in 2010 and 2011, a significantly higher percentage of listed homes sold in 2011 than 2010. The good news to take from that stat is that we continue to clear inventory.
- Median and Average Sales Price remains unchanged from 2010. We bottomed in 2009, ticked up slightly in 2010 and stayed flat in 2011. Once again, several factors contribute to this, but much of that can be blamed on the amount of inventory still being cleared off the shelf.
- Days on Market continues to creep up. The cause for this is most likely the tougher lending standards. With fewer qualified buyers available, it simply takes longer to sell a property. Many buyers that would have easily qualified a few years ago are now forced to rent.
- Percentage of list price received continues its downward spiral. Given there is still too much inventory and not enough buyers, it should come as no surprise that the buyer is in the driver’s seat. Gone are the days of competing offers and above list price sales. The new game in real estate should be called “how low can you go!”
- Months supply of inventory is down! This has to happen before the market can fully recover. In good times the Greenville, SC market typically supports 7 – 8 months of inventory. We are currently at 11 months and falling. Good news in that number.
- Inventory of homes for sale is down. Continuing with the last point, this is a must for the market to recover. The current inventory is below 2007 numbers which is a positive sign. However, it needs to drop further because in 2007 there were more qualified buyers.
2012 should prove to be an interesting year. Since it is an election year, we will probably see very little policy to help or hurt the housing market. One major factor at play this year will be the pent up demand from all the money on the sidelines. Home prices and mortgage rates are extremely attractive right now. The question remains, how long will people wait before jumping in to buy their next home at a historically great price?