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Nevada County Real Estate Market Snapshot - Summer Trends
Created: 9/14/2009
September 14, 2009 – Early in the month, there were 858 active single family listings in our western Nevada County real estate market. This number has been fairly steady for the last 6 months.
This number includes all 3 of the segments we have been discussing: Orderly non-distressed properties, bank-owned REO properties and Short Sale properties. I’ve broken down the active and pending listings by segment in the table below.
Single Family Pending Sales Index for September
Active Listings Pending Listings
|
Total 858
|
136
|
|
Orderly 641
|
85
|
|
REO 43
|
36
|
|
Short Sale 174
|
15
|
We’ll be tracking these figures going forward to gain an understanding of the closing rate for each of these segments. In other words, in a given month how many properties are in escrow, how many actually close, and how do these trends vary by segment. Closing rates have a strong effect on absorption rates, and can be an indicator of secondary factors, such as availability of financing.
In an earlier column, we looked at absorption rates for the 3 segments and for the market as a whole. The overall absorption rate for the month of June was about 10%. Orderly sales were the same, while REO sales were clipping along at 30%, and Short Sales were lagging at about 4%. In the table below are the comparable figures for June, July and August, as well as the median price.
Single Family Sales – Monthly Unit Volume by Segment
June 2009 July 2009 August 2009
|
Total Units 89
|
82
|
76
|
|
Orderly Units 70
|
51
|
31
|
|
REO Units 13
|
20
|
29
|
|
Short Sale Units 6
|
11
|
16
|
|
Median Price $299,900
|
$320,000
|
$297,000
|
There are some striking trends in this table. While the overall absorption rate is holding steady at around 10% with a minor downward trend, the mix is changing dramatically. The absorption rate for orderly sales has fallen from about 11% to less than 5% over the 3 month period, while the rate for REO has increased from an already snappy 30% to a positively torrid 67%! Likewise Short Sales have increased from under 4% to over 9%. This change in the sales mix, while the overall sales rate holds relatively steady, is a positive sign for the health of the market.
What appears to be happening is that the focus of buyer activity has shifted somewhat from orderly sales, which made up nearly 80% of units sold in June, to distressed properties, which in August accounted for 60% of units sold. This is healthy for the market in the sense that we are seeing the distressed properties being snapped up at a rate that is keeping the overall inventory of REO and Short Sale listings steady and avoiding a buildup of these properties in the market. This is a very interesting trend and will be worth following as a reliable indicator of market health.
Throughout this period of change in the mix of properties sold, median price had been fairly steady, with less than a 1% decline in the 3-month period.
We are looking for data that we can make sense of, both leading indicators and trailing indicators, in keeping an eye on the health of our local market as we seek visible signs of a recovery.
Paul Sieving is a Realtor® with CENTURY 21 Gold Dust Realty, has been Chair of the MLS Committee and a Director of NCAOR and Board Chair of the Grass Valley Chamber of Commerce, while serving our community as a real estate professional for 10 years. Comments, questions and thoughts are welcome at Paul@PaulSieving.com or (530) 274-0906
