Is This Finally It?
Are Prices Going Up?
Are prices finally going to increase this year in Summit County?
After three years of little or no change, the trend in 2014 is steadily up.
Through the 1st Quarter of this year, the average sale price increased by more than eight percent from the 1st Quarter of 2013.
March, however, brought average prices that were 34% higher than March 2013.
While the number sold is staying even with last year to date, the number of properties for sale is at near record lows. The combination of increasing demand and low inventory usually causes prices to increase. But for the past year, that has not happened… until now.
The average sale price in March was nearly $590,000, the highest monthly average price since April of 2011. The average price so far this year is the highest since 2009, and the fourth highest in Summit County history. So it’s only one good month, but we’ve seen something like this before. Summit County has had only one other big dip and recovery.
It happened after the 9/11 recession of 2001. That recovery brought three years of price stagnation and then took off increasing ten to fifteen percent per year. Hopefully that unsustainable rate won’t happen this time.
Typically the 1st Quarter has the highest average sale price of the year as large homes sell more frequently and in higher proportion than for the rest of the year.
And while the 274 properties sold this year is the best 1st Quarter in five years, it’s still 77 percent of the average 354 1st Quarter sales since 1992. Things are still not back to normal.
At the start of the 2nd Quarter, properly priced new listings were selling very quickly. Multiple offers and backup offers were becoming frequent.
Meanwhile, the inventory was stuck in the range of 1300 properties for sale. New listings replaced the sold ones at higher prices than the last sale in more neighborhoods and among more property types.
The inventory always peaks in July and declines for the rest of the year. If past averages hold this year, that peak will be about 1600 properties. Last year, 1710 properties sold and ten to fifteen percent more properties have sold each year since the bottom in 2009. Conservatively there could be 1810 sold this year.
Since about twenty percent of the inventory is vacant land and hardly selling at all, the inventory of property likely to sell will really be about 1300.
As prices reach each new level, more prospective sellers will get off the fence and enter the market. But buyers are releasing pent-up demand and rising interest rates and prices are spurring them to act.
Supply will probably remain tight and prices will continue to increase. The real question is how fast?