Periodically I will post updates about the market and trends in Douglas County. I hope you find the information helpful. Should you feel you want to learn more about the market, or would like to buy or sell a property, please feel free to give one of our CENTURY 21 The Neil Company Real Estate agents a call.
Existing home sales in May grew by 1.8%, the highest pace in over 9 years according to the National Association of Realtors. Also, the adjusted annual rate increased to a projected 5.53 million units for 2016. Sales are now up 4.5% from May 2015 and are at their highest annual pace since February 2007 when they were 5.79 million. Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. "The primary driver in the increase of sales is more homeowners realizing the equity they've accumulated in recent years and finally deciding to trade-up or downsize,” says Yun.
Douglas County was no different than what went on Nationwide. Closed sales for Douglas County came in at 154, which was a + 69.2% increase over May 2015 when they were 91. Closed sales also increased over April 2016 by +22.2% when they were 126 vs. 154. In fact, the last May when closings were this strong in Douglas County was in May 2006, when 154 were posted as well. What a coincidence for that number to come in 9 years later at the same amount. The number of closed sales year to date in 2016 are up as well at 602 a +25.9% over 2015 when they were 478.
Pending sales, at 192, were +37.1% higher than in May 2015 when they were 140 but cooled 2.5% from the 197 in April 2016. Again, this follows the National trend where pending sales dipped 3.7%. According to Mr. Yun, "with demand holding firm this Spring and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale in May and ultimately dragged down contract activity." Many of our sales are occurring in the price range up to $250,000, with the strongest activity in the $200,000 price range.
Douglas County saw 231 new listings offered in May, which is +11.6% ahead of May 2015 when they were 207. Our year-to-date inventory of listings is 1,007, which again is down from 1,024 in May 2015. Inventory decreased in May to 4.1 months, the lowest it has been in over 3 years. This is good news for sellers because this indicates that there are fewer homes on the market thus buyers have less to choose from, which puts us in a seller's market. When the inventory is more than 6 months we are then in a buyers’ market.
Also, total market time has decreased to 109 days, this is down by 31.5% from last year when it was 159 days. This is another good sign that the market is improving.
When you compare year-to-date, the average sales price rose +4.2% from $180,500 to $188,000 (2016 vs. 2015). Also, when you compare May 2016 to May 2015 the average sales price increased as well from $179,400 to $191,700. As you can see this a positive trend in the appreciation rate in Douglas County by +6.9% the highest since 2006.
Please keep our military men and women and their families that are currently serving our country all over the World protecting our freedoms in your thoughts and prayers. We just celebrated our Independence Day and we as country have so much to be thankful compared to other war torn parts of the World. As a good friend of mine texted me on the July 4th, "those of us who are Veterans know that there is a difference when one serves and defends our Country's freedom than those that live in our Country who have their freedoms protected." WOW! That is profound to me as a Veteran.
Summer is here and what fun! I was attending a meeting the other day and visiting with friends when I asked about their summer plans. Most of us are going on a trip, some to Montana, Utah, Tennessee, California, Washington DC, or the Washington coast. Some are even going to Europe and the Olympics in Rio. In other words, amongst a group of six people we are going all over the place. Isn't it great to live in a country where we have this much freedom and mobility? I hope you and your family are planning something fun this summer!
Nationally pending sales rose for the third consecutive month and in April reached their highest level in over 10 years. The pending sales index is a forward looking indicator based on real estate sales contracts that have been signed and are waiting to close sometime in the future. The West and the South region of the country saw the most increase in pending sales. Mr. Yun, NAR Chief Economist, says, “the building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down appear to be bringing more interested buyers into the market."
In Douglas County, we saw our pending sales increase as well. At 197, these accepted offers were +19.4% stronger than April of 2015 (165) and +9.4% stronger than last month of 180 pending sales. It was the strongest pending sales month since 2005, when there were 201 offers accepted (which mirrors the national trend.) This is good news for the sellers because with many of these offers closing the market indicator is positive. I am very encouraged by this upward trend and I, along with many in our industry, feel 2016 will be another good year for real estate.
New listings grew by some 23.6% to 214 which edged out last month when they were 195. Of course, as the market improves and the busy season to sell real estate is upon us, we always see an increase in listings. Many sellers that were reluctant for one reason or another, decide to put their house on the market to sell. Why not? All trends are pointing in a positive direction and with that comes a better chance of them selling their home. The four basic functions in the sale of real estate are still true; 1-motivation of the seller; 2-condition of the property; 3-location of the property and the 4-the proper pricing of the property.
Closed sales are increasing as well but at a slower pace. In April of 2016 closed sales were 126, which is the same as last month, but edged out April 2015 by one when they were 125. Historically, Douglas County closed sales are about 1200 or 100 a month. This year is up due to the motivation of the buyers to buy and the sellers becoming more realistic in the pricing of their homes. Total marketing time decreased to 158 days this April down from March when it was 180 days. Inventory edged up slightly to 5 months compared to 4.8 months last month.
Comparing the average sales price of $184,300 (April 2016) to the average sales in April 2015 when it was reported at $191,100 we saw a decrease of -3.6%. However, when you compare these prices to the previous month ($171,200) the average sales price rose by +7.7% to $184,300 in April 2016. The median price range rose significantly to $165,000 v. $156,00 which is an increase by 5.8%.
Thus far this year, all real estate indicators in Douglas County are heading in a positive direction and I feel that this will continue through the fall. We are very fortunate to have more listings that buyers can choose from and the willingness of the sellers to help the buyers secure financing. Sellers are willing to cooperate more aggressively in getting their properties sold.
Again, please keep our military men and women along with their families in your thoughts and prayers. They are making many sacrifices for us. I, along with my wife, attended a Memorial Day ceremony at the VA, and it was very emotional for the both of us. As a veteran, it made me feel so humble and honored to be on that hallowed ground where many veterans are buried who died for our country.
WOW, what an election season we are having! I am hopeful that you have voted for your choices amongst the candidates that are seeking various offices to represent us. I worked on Capitol Hill right out of college for an Oregon Congressman, Al Ullman, and he told me then, "get involved in your local political arena, for that is where you have the most influence!" In other words, it is at the local level and state level that politics really matter. As a citizen you can see the most benefits from your vote. Please vote!
Residential highlights for the month of March saw increases in both pending and closed sales in Douglas County. Pending sales at 180 were up +24.1% compared to March of 2015 and +23.3% compared to February 2016. We track pending sales because a majority of them turn into closed sales. It is also a good indicator of what direction the market is trending, and with more pending sales, it becomes good news for sellers. Thus, you can expect what will happen in the near future. Also, this was the strongest March for accepted offers in Douglas County since 2005 when 188 offers were accepted for the month.
Closed sales at 126 were strong as well, rising +10.5% over the 144 sales posted in March 2015 and +43.2% over the 88 closing posted last month in February 2016. This was again, the strongest March for closings since 2005, when 127 were closed. The real estate market is reacting nicely to the low interest rate of 3.61% for a 30-year mortgage and the low inventory. Many buyers are making their purchases because they have missed out on other properties so they want to get a property now before they miss out again.
There are a number of challenges that we are seeing with a hot market, appraisals are taking longer, compliance work that needs done is taking longer, lenders are coping with the new regulations as far as a 3 day cooling off period for buyers called TRID, and buyers getting all their documentation in and submitted to the underwriter to process the loan. It has always been a juggling act to get sales to close, and now more than ever, it is definitely a challenge. There are more and more reviews of loans than in the past, which has led to the slowdown in closing dates. We are recommending a 60-75-day closing date just to make sure we can get all the work done, and if closes earlier, everyone is much happier.
As we compare the average sales price of homes in the 12 months ending March 31st, they are at $187,600 which is up +4.4% over March 2015 when the average price was $179,700. The same comparison of the median shows an increase of +7.1% over the same period. Our inventory is at 4.8 months which is the lowest inventory in months since 2005. You can see that we are in a seller’s market as we call it. Whenever the market reaches less than 6 months, we view the market "hot." In fact, we are beginning to see multiple offers where the seller is receiving more than one offer at the same time. Pricing is still very important; so if property is priced competitively, it will sell in this environment.
Please keep all of our military men and women and their families in your thoughts and prayers. Without their sacrifices we would not be able to exercise our right to "vote." We would not be a democracy. As a veteran, I encourage everyone I meet that is over 18 to register to vote for it is their way to show respect to us as Veterans that fought for our freedoms.