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How is our market doing?
Is it a Buyers market?
Is it a Sellers market?
CHALLENGE QUESTION: C
an you name the month that has had the MOST closings each year for the past 2 years for Single family homes?  Answer at the bottom of the article.

The above are common questions for anyone that deals with real estate or is thinking about buying or selling.

To answer many of these questions, it is best to take a look at hard numbers to get your answer rather than taking someone else’s word for it. Remember, this is a BIG investment if you are a Buyer and probably your biggest asset if you are a Seller.  The more information you can get, the better personal decision you will hopefully make for yourself.

Following is a look at just the month of October for sales of Single Family home sales in Fruita and the Grand Junction area.  Modulars and manufactured homes are not included in the data.

2016

2015 2014 2013

2012

# of Sales

188 182 190 162

167

Median Sales Price

$225,250

$209,900 $210,000 $185,636

$165,000

Median. SP/LP %

98%

98.60% 98.06% 97.92%

98.15%

Median Days on Market

76

79 101.5 94

78

Avg. Days on Market

96

115 118 113

98

Median Sold Price/Sq.Ft

$135

$127.06 $121.50 $ 111.00

$107.62

The following looks at the previous 5 years sales between Jan. 1st and Oct. 31st.  Same parameters as above.

2016

2015 2014 2013

2012

# of Sales

2,149

1,985 1,789 1,747

1,751

Median Sales Price

$213,600

$204,000 $194,900 $185,000

$173,500

Med. SP/LP %

99%

98.73% 98.32% 98.24%

98.22%

Median Days on Market

74

80 91 84

82

Avg. Days on Market

98

110 119 109

111

Median Sold Price/Sq.Ft

$133

$125.30 $118.81 $113.25

$107.76

Analysis: Looking at Jan. 1-Oct. 31st over the years, you can see that 2012-2014 had almost the exact same number of sales each year.
Sales in 2015  was up ~11% vs 2014 and now, 2016 has exceed that by increasing 8.24% vs 2015.
Median sales price has been fairly consistent by increasing at around $10,000 per year.
Days on market-  median days on market has dropped by ~1 week vs prior year and the average days on market has dropped by ~10% vs previous years.

Conclusion:   Demand has been increasing by ~8-10% per year for the past 2 years.  Days on market has fallen (that’s a good thing for a Seller).  
Typically, these 2 items coming together would result in a more dramatic increase in Sales Price…but that has not happened as much as I would have guessed given the increased sales coupled with decreasing days on market.  

The question we will find out the answer to over the next 6-12 months is…will we start to see more of a dramatic jump in sales prices due to
1) lower days on market,
2) increased # of sales
3) fairly tight sales price to list price ratio (99%) which shows that Sellers feel they are in better bargaining position than Buyers  
4) really low interest rates.  

Obviously there are other BIG factors that will also steer our market such as our national as well as local economy as we transition into a new leadership and policies, will interest rates stay low (keep an eye on the bond market), and of course the state of our local job market.

Another item that is very important is to keep an eye on is interest rates which is not touched on in this article.  Rates are historically low but rates moving up or down can affect how much one can afford.  2 days after the somewhat surprising presidential outcome, interest rates had jumped 1/4% in a day.  To show how much that affected a Buyer, someone looking at a 15 year loan whose rate moved up by 1/4%, they would have been charged about 1 point to buy their rate back down to what is had been 48 hours prior had they not locked their rate in.  A point is 1% of your loan amount so a $200,000 loan, the jump in interest rate meant a $2,000 cost to buy the rate back down OR if they did not buy the rate back down, then the Buyers could now qualify for a slightly less grand total than they previously could have.

What month has the most number of closings?
Answer: May.  Each year for the past 2 years, May has had more closings than any other month but keep in mind, this is when a home sells NOT when it goes under contract.  Assuming that a typical contract is 30-45 days in length and that means most of these May closings are going under contract in Mid- March through end of April.  So, plan accordingly.


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