Market Update - Sales slide as supply soars

Condo and co-ops

There were 44.9 percent more apartments put on the market in January than in the same month last year, reaching 584 as opposed to 403. The bulk of new listings were in the $200,000-400,000 range, which accounted for 270 of them. The supply of units offered at $150,000-200,000 rose 141.7 percent, to 58. Only at the lowest and highest levels were there any declines, and they were inconsequential. By the end of the month, 1,006 condos and co-ops remained active versus 436 at the same time last year; the change was 130.7 percent, causing a rebound from December’s slight dip close to last fall’s 12-month peaks. There were strong double-digit gains at all levels and double-digit decreases at the top and bottom of the scale.

Sales activity was 12.2 lower than it was in January 2005, keeping pace with new listings at not a single price point. Above $800,000, the number of ratified contracts sank significantly but on bases no higher than eight. In the $500,000-700,000 range, there were unimpressive increases in sales. Volume otherwise fell or grew unremarkably. The total was about even with the previous two months, though showing no sign of the strength earlier in 2005.

January’s absorption rate was an anemic 21.4 percent, below December’s 23.2 percent of available apartments. November’s rate was 20.7 percent and October’s, 22.6 percent. In September, the market absorbed 25.4 percent of the 1,212 homes available. That rate compares with 53 percent in April and lower rates in each of the successive months, dropping to 43.5 percent in July and 38.7 percent in August.

Prices appear to be leveling off, going from an average of $397,442 to $409,880 so far this year. The median is now at $347,000 in contrast to $340,000 in 2005. The gap between the average and the median may be widening, suggesting that the highest-priced apartments are pulling up the average.

Single-family homes

Newly listed homes last month totaled 519, 11.6 percent more than in the January 2005. Inventory climbed in the robust double digits at all levels above $400,000, except homes offered between $900,000 and $1 million, which jumped 128.6 percent to 16, and those between $1 million and $1.25 million, which edged down 8.3 percent to 11. Below $400,000, new listings were off between 8.2 percent and 63.9 percent, depending on the price level. Still seeking buyers at month’s end were 953 properties, 61.3 percent more than a year earlier. The supply was greater in the triple digits at $400,000-600,000; $700,000-800,000; and $800,000-1 million. The amount of inventory ticked up from December, reversing a slight downward trend from the 12-month high in October.

Sales volume for the month went down by 8.7 percent, with most of the weakness above $1 million and below $700,000. Strong double-digit growth occurred between $700,000 and $1 million. Recording the most sales was the $300,000-400,000 range, which actually dropped 4.7 percent from 86 to 82 homes sold. At $200,000-300,000, homes on the market went under contract 57 times, 14 percent more than in 2005. Below that level, activity was off the previous year’s. Only at the $700,000 800,000 level, where there was a 40 percent increase in sales, did the number of homes sold outpace the growth in new listings. Still, January’s sales were higher than December’s but behind the rest of the previous 12 months.

The market absorbed 26.1 percent of the available homes, better than December’s 21 percent rate. In November, the rate was 24.9 percent. It was 26 percent in October, 28.1 percent in September, 35.8 percent in August and 35.5 percent in July. Earlier in 2005, the rates were far higher.

Ascending from $555,037 last year, prices continue to soar; the average is now at $627,023. At the same time, the median shows signs of tapering off, going from $418,250 in 2005 to $460,000. In 2004, the average was $485,575 and the media, 320,500.

What it all means

Agents are saying that they believe a lot of the inventory out there has been around a while, lacks quality and certainly is overpriced. Consider this: Properties sold for 98.44 percent of their asking prices in 2004 and for just 95.7 percent last year. They are not being priced realistically, and buyers are responding rationally. Yet there are abundant signs that the market has picked up. Folks searching for property are looking in discernible numbers, but they are once again taking their time and negotiating hard. The result is the most balanced market in years.