It was a year of strife, acrimony, a huge stock market run-up, continued wage and GDP stagnation, and a general atmosphere of toxic uncertainty.
So how did Summit County do in 2016? Surprisingly, pretty well.
Sales fell short of last year’s but prices increased moderately. Pretty much everything that was listed was sold and usually very quickly.
The historically low inventory helped to create a somewhat false sense of urgency. That probably spurred some buyers to act who might not have if there had been a normal number of properties to choose from. Same goes for the threat of higher interest rates.
But the year ended with the sound of crickets that started with the election results. Buyer and seller activity just stopped. I’ve never seen that in 30 years, but I’ve been saying that a lot this year.
Here’s the details.
On January 1, there were a total of 587 properties for sale in Summit County. 271 of these were vacant land and commercial. 316 of these were residential properties. 157 of those residences were priced under $1 million. 96 of those had been for sale for 90 days or less, the majority for 30 days or less.
For perspective on this, 1659 residences sold in Summit County in 2016 for $1 million or less. On January 1 there was about a 1 month supply of these properties. No wonder they are selling so fast.
Residences priced over $1 million numbered 160, 80 had been offered for 180 days or more. Several, and not the most expensive at that, had been on the market for over a thousand days.
228 residences listed for $1 million or more sold in 2016. There was an eight and a half month supply, the only over supplied segment of our market.
2096 properties of all types sold through the Summit Association of Realtors MLS in 2016, about four percent fewer than in 2015. The average sale price increased by 4.8%, however.
So what does it all mean? Here’s a fun fact:
Prices have increased while volume declined three previous times in Summit County: in 1995, 2001, and 2007. The first two events were followed by three years before volume regained it’s previous high.
In 2008, prices reached their all time high while volume dropped to half of its all time high reached just two years before.
Prices are a lagging indicator, they continue to increase even as volume falls off.
Our market has still not recovered from the 2007/08 event to the previous high of nearly 3000 sales. So the market has leveled off at a lower level of sales while prices continue to increase. Whether this is a plateau that we stay on for some time or the start of a decline, we have probably seen the near-term high for volume.
Barring a major economic meltdown such as the Lehman Brothers bankruptcy, these events last for about 3 years and usually don’t bring major price drops. In fact prices only took a year to regain the previous high in the ’94 and ’00 events. Even in the Bush Depression prices declined for only 3 years and returned to beat the previous, all time, high in 2016.
It appears that our market is heading for a plateau period with not much change in volume or price for one to two years. As to inventory, who knows? Until sellers see which way this market is going to jump, they will probably continue to sit on their hands. But when they finally decide to act, look for plenty of property on the market.
It takes a lot to injure this market. With the demise of “liar loans” and sub prime mortgage speculators, buyers routinely put significant money down at closing and must be much better qualified than perhaps ever before. This takes a lot of the downside risk out of our market. That may be why nobody is selling. Summit County real estate looks like the safest place to put your money in an uncertain environment.
Archives for January 2017
Posted in Economist Commentaries, by Amanda Riggs on November 17, 2016
The numbers are in for 2016—selling your home with a REALTOR® could get you $60,000 more on your home sale. From the recently released 35th anniversary edition of the Profile of Home Buyers and Sellers report, homes sold with an agent or broker received a median of $245,000 in 2016 compared to the median selling price of $185,000 for For-Sale-By-Owner (FSBO) home sales.
That number drops even lower to $168,300 when the FSBO seller knew the buyer, that’s $76,700 less than what sellers are getting with the help of a REALTOR®.
The top reasons that sellers decided to sell their homes without the assistance of a Realtor was that they did not want to pay a commission or fee (39 percent), they sold to a relative, friend or neighbor (33 percent), or the buyers contacted the seller directly (14 percent). Of the FSBO sellers that did not know the buyer, 61 percent (up from 59 percent last year) simply did not want to pay a commission or fee. Not only are FSBO sellers losing money in the transaction, they end up doing all the work.
The 2016 Profile of Home Buyers and Sellers report draws on 35 years’ worth of reliable data on FSBOs.
In 1981, the market share of FSBO sales was 15 percent and those that sold with the assistance of an agent was 85 percent. FSBO sales peaked in 1985 at 21 percent of all sales (in the same year 75 percent were agent-assisted sales).
Since 1981, FSBO sales have steadily declined over the last three and a half decades, dropping below double digits by 2010 to just nine percent of all sales.
This year, the demographics of FSBO and agent-assisted sellers were very similar, despite the large gap in between the final home sale price.
Seventy-three percent of FSBO sellers were married couples with a median age of 59 years and a median income of $100,600.
Seventy-six percent of agent-assisted sellers were also married couples, 53 years old, and had a median income of $101,300.
Last year, FSBO sellers typically had lower incomes than those who worked with an agent. No wonder, eh?
Your home is your castle… until it hits the market. Then it becomes a commercial enterprise. Yes, you still own it and make all the payments, but you will be sharing it with buyer prospects. And if you want to get it sold, you’ll need to make some accommodations.
Buyers want to try the place on, imagine how it will be to own it, pretend it’s theirs already. Everything that interferes with that process needs to be eliminated.
Keeping the place relatively clean and neat while living there every day is tough, but will pay off in a higher price and faster sale. The goal is for your home to present as close to a show home as possible while you are still living there.
Removing your 105 pound Rottweiler for showings will help. Not everyone loves dogs and some prospects (and brokers) won’t even go in a house with a growling, barking dog guarding the place.
Stalking the buyers around with their broker is a great way to creep buyers out. They want to be able to roam freely through the home without worrying that there will be toes sticking out from under the bed covers. They want to be able to discuss the place freely amongst themselves. And it’s better if you don’t hear that.
If it’s your vacation home, you need to keep the heat and water on even though it will cost money. A cold home will cost you more in shortened and uncomfortable showings. Turning off the water might net you a messy surprise, too.
And don’t yell at your broker if she is reluctant to give you the code to the lock box. It’s not personal. The idea is to be sure there’s a key there for the broker who is showing, not in your or your guest’s car headed back to Kansas.
Sellers need to think of themselves as hosts to guests they haven’t met yet. What do you do when you expect a guest? You try to make them as comfortable as you can.
Keep in mind that one of these guests will be giving you a lot of money. That should make up for the inconvenience and effort of holding a perpetual open house.
And if it helps sell faster, the faster you can get back to your own life again.
So Chuck – the question goes – how come your sales figures are always less than the ones in the local newspaper? They said 2300 properties sold through November and you say only 2100 sold for the whole year.
Good question. Apparently they use the County Clerk’s figures that cover all types of sales: FSBOs, transfers between related parties, etc. If it has a warranty deed, it counts.
My figures are from the Summit Association of Realtors MLS and include only sales that Realtors are involved in and only in Summit County proper. (Our MLS covers parts of Grand, Park and Lake counties.)
These sales are completely verifiable regarding price, terms and who bought and sold. The data has been collected under the same rules for many years and we get fined for incorrect entry of sales. I can rely on the data from 1985 just as much as from this year.
So it’s hard to believe that this year three or four hundred properties, or about 20% of County sales, transferred outside of the MLS.
The news people have deadlines and need strong hooks to make readers wade through dry stats. So they feature how many multi-million dollar homes sold last Quarter even though 60% of Summit sales are for $600,000 or less.
So, no, I have no ulterior motive. It’s just a difference in how we collect and analyze data.