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Market Insights

John Rice's State of the Seacoast speech

Fomer NHAR President John Rice's speech at the Seacoast Board of REALTORS State of the Seacoast News Conference October 3, 2014 


Thank you all for coming and may I be the first to thank Prof. Smith for your enlightening and interesting presentation this morning. Do you make Fantasy Football projections? Just kidding. I also want to than Kristen McNulty of Tate and Foss Sotheby's International Realty for stepping up and helping me with this power point presentation. And thank you to the public relations committee-could you guys all stand up and be recognized.

So...the State of the Seacoast Real Estate Market in the 13-Sample Seacoast towns.

Let me begin by saying that the numbers I am about to share with you are uncorrected. We usually wait five days before we do our tabulations. We find that the volume of "closed" units for any given month will change over the following 30-days as it seems to take longer than 48-hours for some entities to report closings. Hence we correct last month's numbers at the end of the next month to keep accurate statistics. This, of course, will throw off the number of sales in given price points, the year-to-date volume and the median sale prices for both the month and the year.

Already we are doing better than the power point indicates, as I checked figures at the last minute yesterday. That is to be expected and its good news.
First, single-family prices for the first nine months of 2014 are up to a median sales price of $369,500, as opposed to $348,000 last year at this time-both numbers are based on an identical cumulative volume of 806 sales. That's a 6.17% price improvement. Sooo, as a take-away for all of you REALTORS out there-when doing your CMA's maybe using ½% per month appreciation on comparable sales that are six months old is a conservative, supportable number. As you can see from this graph, prices started surpassing 2013 in May and have not looked back. Whether this trend continues is subject to some speculation and I'll discuss that in a moment.

Total single family volume is, as I indicated, exactly the same as last year despite what this power point shows. It's likely to be even better when corrected. This is a trend that compares favorably to the rest of the state, which has seen sales volume generally decline below 2013. To be sure, the 85 sales we have recorded so far for September is 4.4% below last year and 15.8% behind last month, but again, the month is young! Let's see how it all shakes out after correction.

Turning to the condo scene, we can see from this graph, that unlike median single family sale prices, condo median sale prices have trended higher all year long until this month where the monthly number so far is $247,500. That represents a substantial 7.3% decline from September 2013 and a drop of 12.2% from last month. But cumulatively for the year, we are still up 4.3%. So the take away here is that maybe we, as REALTORS, calculate something like ¼% per month appreciation on your condo comparable sales for the last six months when doing your CMA's.

When it comes to condo sales volume, thanks to a strong start on the year, we are outpacing 2013 by 404 to 376 or 7.4%. That gap should get even greater as the month goes on and corrections come in. Clearly, September was a good month for condo sales with volume up 16.6% from last year and an amazing 19.1% from last month.

So, looking at the big picture from 20000 feet: Single family volume is exactly the same and probably a tiny bit better than last year and condos hold a good lead over last year-with median sales price up for both. Again 6.17% for single family sales and 4.3% for condos.

Finally, we will see that single family inventory numbers are up for each of the past four months from last year. Available inventory, in fact, was at the same number in September as it was at the start of August or 552 units which nearly matches the high for the year of 556 units in July. Traditionally fall is the time of year when available inventory usually declines. So this situation is unusual and significant. The gap over 2013 is particularly pronounced for condo inventory which may be a contributing factor to the substantial drop in this month's median sales price. I will refrain from speculating about what might be the root causes for all this extra inventory. Certainly, the situation presents more choices for buyers, while sellers still can command higher prices for their properties.

In conclusion, if your eyes are not blurred by now and your head dazed by all these numbers, I suspect that increased inventory levels can only put downward pressure on median sale prices as we go through the final quarter of 2014. It is significant that last October saw the highest monthly sale prices for the year-something that usually happens in June. It's a record that could be hard to match or surpass this year as inventory increases.

Overall, it's been another solid year for sales on the Seacoast-maybe not earth shattering, but consistently strong and better than the state as a whole. I wish you all the best of everything in the final quarter of 2014.

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