If there could be one major headline for local real estate sales in 2012, it would be the decline of the inventory of homes, or rather, the continuation of declining new homes getting listed.
The inventory of homes dropped off the cliff to the lowest level since 2006. There were waaaaay fewer people putting their homes on the market. Also-there were fewer homes being built compared to 2006. The inventory of existing homes was down 24.4% and the inventory of new constructions was down 45.6%. New Constructions saw the biggest decrease in inventory of homes in 2012, which I believe will reverse in 2013 and show the biggest increase...new phases in Dunlap are being built in Wynncrest, Stonegate, Copper Creek, Fields Crossing, Sommer Place to name a few.
The months supply of homes in Nov 2012 saw a decrease of 34.6% with existing homes. However, for new constructions, there was a decrease of 60.3%, from 10.2 months supply in 2011 to 4.2 months in 2012. A 5-6 month supply is a balanced market. We haven't had a segment of our market under the balanced equation in a few years. As of Nov 2012, we had about a 5.5 month supply of homes which is a perfect balanced market. Aug 2009 saw the average highest month for inventory that year, in 2010 it was Sept, in 2011 it was June. In 2012 it was crazy drop. Buyers were buying homes in 2012, without the supply being restocked fast enough. At least up until the last month.
Going of the latest stats available, which is Nov. 2012, it shows a year to date decline of new listings of 1.1%, however a Nov. 2011 to Nov 2012 decline of 4.7%.
If there is any indicator of what lies ahead, it is an overall slowdown in the number of home sales-particularly exisiting sales for the next 2-3 months, with a larger increase in new construction sales.
While year to date (YTD) numbers show an increase in the number of pending transactions (+16.6%), the November 2011 to Nov 2012 numbers show a decrease of 11.4%. The 11 months prior to Nov 2012 have shown an increase in the number of pending transactions-every month, so this was the first decline in at least a year. With a decrease in pendings for Nov, it should project a decrease in closings for Dec 2012 compared to Dec 2011.
For closed transactions YTD, as well as Nov 11' to Nov 12', the number of closed transactions is up 17.1 and 17.8% respectively. Meaning the market remained strong up until Sept/Oct. What happened at that time to decrease the number of pendings for Nov? Part of it could be Caterpillar's forecast for a slight pull back in 2013 and not moving people around as much as in 2012.
Days on Market year to date showed a decrease of 5.8%. That's good. Homes are selling faster. For Nov 2012 it showed a decrease in Days on Market of 2.2% compared to the prior Nov. Still sounds good except the 2.2% decrease was actually an increase compared to all prior months going back to July 2012. This shows perhaps a slowing of the market for days on market and I believe a point where things will stay the same...not sell faster, but not sell slower..but possibly slightly lower.
Average sales prices for Nov 2012 were up 7.7% compared to Nov 2011, and year to date they were up 6.4%. It's good...but not as good as 2010. Nov 2010 average selling price was $144K, whereas in 2012 it was $137K. Not a huge difference, but big enough to mention.
Listing price to sales price-across the board pretty much the same. Overall (new and existing homes) right about 88.8%.
What homes are seeing the biggest jump in pendings? New constructions (up 36.9%) vs. pre-owned homes (up 15.4%).
What price range saw the biggest jump in sales? $400-$500K up 55.4%, followed by $300K to $400K (up 25.4%), followed by $500K and up (up 25.1%), and $225K to $300K (up 24.1%)
Days on Market....homes above $500K saw the biggest increase (+19.8%)-however I would argue that they are existing homes above $500K and not new constructions. There has been a large, very large, increase in the number of presold new upper level homes being built in 2012 compared to 2009/2010/2011. Homes in this category saw an increase from 117 days to 140 days. Homes under $75K saw a decrease of 97 days down to 86 days.
Sold price compared to original list price...pre owned homes are at 89.8% and new constructions are at 98.2%, both up from the prior year.
CONCLUSION....we have an under supply of new homes in 2012, however it will start to correct itself in the form of new construction starts in the different subdivisions I mentioned at the top of the page. Existing homes, particularly those above $200K within the city of Peoria and Dist 150 will continue to have a difficult time competing with the new homes being built unless they are updated. We will see slightly more new homes being built in the higher prices ranges (above $450K) even though the market might show a need for a larger increase, if for no other reason than there are not very many exciting lots to build on in the new construction subdivisions. The remaining lots in some new subdivisions are just not that enticing...which might prove a bonus for existing homes in higher price ranges that sit on better lots. The new park being developed north of Wilhelm Road will continue to be a draw for the subdivisions around it (Wynncrest, Stonehenge, Copper Creek, Stonegate). Builders will have one of the better years than they have had in the last few.
The inventory of homes dropped off the cliff to the lowest level since 2006. There were waaaaay fewer people putting their homes on the market. Also-there were fewer homes being built compared to 2006. The inventory of existing homes was down 24.4% and the inventory of new constructions was down 45.6%. New Constructions saw the biggest decrease in inventory of homes in 2012, which I believe will reverse in 2013 and show the biggest increase...new phases in Dunlap are being built in Wynncrest, Stonegate, Copper Creek, Fields Crossing, Sommer Place to name a few.
The months supply of homes in Nov 2012 saw a decrease of 34.6% with existing homes. However, for new constructions, there was a decrease of 60.3%, from 10.2 months supply in 2011 to 4.2 months in 2012. A 5-6 month supply is a balanced market. We haven't had a segment of our market under the balanced equation in a few years. As of Nov 2012, we had about a 5.5 month supply of homes which is a perfect balanced market. Aug 2009 saw the average highest month for inventory that year, in 2010 it was Sept, in 2011 it was June. In 2012 it was crazy drop. Buyers were buying homes in 2012, without the supply being restocked fast enough. At least up until the last month.
Going of the latest stats available, which is Nov. 2012, it shows a year to date decline of new listings of 1.1%, however a Nov. 2011 to Nov 2012 decline of 4.7%.
If there is any indicator of what lies ahead, it is an overall slowdown in the number of home sales-particularly exisiting sales for the next 2-3 months, with a larger increase in new construction sales.
While year to date (YTD) numbers show an increase in the number of pending transactions (+16.6%), the November 2011 to Nov 2012 numbers show a decrease of 11.4%. The 11 months prior to Nov 2012 have shown an increase in the number of pending transactions-every month, so this was the first decline in at least a year. With a decrease in pendings for Nov, it should project a decrease in closings for Dec 2012 compared to Dec 2011.
For closed transactions YTD, as well as Nov 11' to Nov 12', the number of closed transactions is up 17.1 and 17.8% respectively. Meaning the market remained strong up until Sept/Oct. What happened at that time to decrease the number of pendings for Nov? Part of it could be Caterpillar's forecast for a slight pull back in 2013 and not moving people around as much as in 2012.
Days on Market year to date showed a decrease of 5.8%. That's good. Homes are selling faster. For Nov 2012 it showed a decrease in Days on Market of 2.2% compared to the prior Nov. Still sounds good except the 2.2% decrease was actually an increase compared to all prior months going back to July 2012. This shows perhaps a slowing of the market for days on market and I believe a point where things will stay the same...not sell faster, but not sell slower..but possibly slightly lower.
Average sales prices for Nov 2012 were up 7.7% compared to Nov 2011, and year to date they were up 6.4%. It's good...but not as good as 2010. Nov 2010 average selling price was $144K, whereas in 2012 it was $137K. Not a huge difference, but big enough to mention.
Listing price to sales price-across the board pretty much the same. Overall (new and existing homes) right about 88.8%.
What homes are seeing the biggest jump in pendings? New constructions (up 36.9%) vs. pre-owned homes (up 15.4%).
What price range saw the biggest jump in sales? $400-$500K up 55.4%, followed by $300K to $400K (up 25.4%), followed by $500K and up (up 25.1%), and $225K to $300K (up 24.1%)
Days on Market....homes above $500K saw the biggest increase (+19.8%)-however I would argue that they are existing homes above $500K and not new constructions. There has been a large, very large, increase in the number of presold new upper level homes being built in 2012 compared to 2009/2010/2011. Homes in this category saw an increase from 117 days to 140 days. Homes under $75K saw a decrease of 97 days down to 86 days.
Sold price compared to original list price...pre owned homes are at 89.8% and new constructions are at 98.2%, both up from the prior year.
CONCLUSION....we have an under supply of new homes in 2012, however it will start to correct itself in the form of new construction starts in the different subdivisions I mentioned at the top of the page. Existing homes, particularly those above $200K within the city of Peoria and Dist 150 will continue to have a difficult time competing with the new homes being built unless they are updated. We will see slightly more new homes being built in the higher prices ranges (above $450K) even though the market might show a need for a larger increase, if for no other reason than there are not very many exciting lots to build on in the new construction subdivisions. The remaining lots in some new subdivisions are just not that enticing...which might prove a bonus for existing homes in higher price ranges that sit on better lots. The new park being developed north of Wilhelm Road will continue to be a draw for the subdivisions around it (Wynncrest, Stonehenge, Copper Creek, Stonegate). Builders will have one of the better years than they have had in the last few.
