Average sales price per square foot – Year over Year
- Monthly Average Sales Price per Sq. Ft.: $149.48 versus $138.64 last year – up 7.8% – and up 0.5% from $148.79 last month
- Monthly Median Sales Price: $244,900 versus $227,800 last year – up 7.5% – and up 1.6% from $241,000 last month
Supply remains lower than last year, but the gap closed slightly compared with last month in terms of active listings with no contract. We are starting to see more new listings than last year. The third quarter is up 2.5% from last year and up 5.5% from 2015. So far the extra supply is not having much effect, but if it continues for several months finding a property could start to get a little easier for buyers.
The monthly sales rate is up only 1.8% compared with a year ago. Both August 2016 and August 2017 had the same number of working days (23) so we have a fair comparison to draw. Since the year over year growth was 5.7% in June and 3.0% in July we again see a continuing slow downward trend in the advantage that 2017 has over 2016 in sales volume. Growth in the annual sales rate has almost stopped with 95,000 proving to be a difficult line of resistance. All these point to a gradual fading of demand. The serious shortage of supply obscures that fade.
We experienced a seasonal price drop between June and July, but prices have already bounced back during August and are likely to remain on an upward track for the rest of 2017 at least.
We still have a seller’s market in most locations and price ranges, but the current trends means the seller’s advantage has very little momentum. Before buyer`s get too excited, the trends are very mild in nature. As such we do not currently see major increases in buyer’s bargaining power coming anytime soon.
Of course, the market could change quickly, as it did in the summer of 2013, but there is not much sign of this in any of the numbers at the moment.
This commentary was provided by Michael Orr of the Cromford Report. Michael Orr is the Director of the Real Estate Center at the W.P. Carey School of Business at Arizona State University.
