The strongest fall market we have seen in the last 6 years continues with rising sales, falling inventory and prices firming up continuing to move solidly into a Seller’s market. It is the right time to get your home sold. Looking at the early December month-to-date numbers, we see that the market may be cooling off with the colder winter temperatures. Read on for more details.
Sales - The total sales for the 12 months ending November 2014 rose to 1,025, up 35% from the 12 months ending November 2013 and the highest volume of sales in the last 7 years since 2007.
Inventory - The average monthly inventory of single family homes dropped down 12% to 556 for the last 12 months ending in November 2014, the lowest average inventory we have seen in the last 7 years. Inventory has not been this low since 2007, the year before the start of the recession triggered by the US banking crisis.
Prices - Average median prices continue to rise slowly. At $342,767, average median prices for the last 12 months ending in November 2014 rose 2% over average median prices for the 12 months ending in November 2013. This increase is for average median prices across the board and is largely due to the fact that prices on higher end homes have been reduced so much (some by as much as 25%) that sales of higher priced homes are now starting to recover and are pushing up average median prices. This is causing the illusion that prices are increasing in all home categories and that is definitely not true.
For instance, right now some price ranges in some neighbourhoods are starting to rise slightly but other price ranges have just stabilized or are still dropping slightly. Therefore, overall average price in any given marketplace cannot accurately predict what is happening. I have found that using an HPI (Home Price Index) works best. This HPI considers all the sales of a typical house in a certain area and compares them to the same type of houses sold in the previous years. We find when we do an HPI that house prices are doing different things in different areas and in different price ranges. I would be happy to do an HPI evaluation on any property you have. Simply give me a call or send me an email.
The rate at which our inventory is being absorbed by sales continues to rise. The average absorption rate of 15.06% over the 12 month period ending November 2014, is now the highest in the last 7 years. At the end of November 2014, there was 8 months of inventory available on the market, up from 5 last month. This is still considered a balanced market trending towards favouring Sellers over Buyers and will eventually put more upward pressure on prices as inventory tightens.
From these numbers, it looks like we can expect the market to continue to rise as we continue in this busiest market we have seen in 7 years. Sales for the first week of December 2014 are at par with sales for the same time period in December 2013 which may suggest a short cooling off period as it gets colder.
The market over the next 6 to 12 months will be characterized by continued increasing sales and lower inventory moving more rapidly towards a market that favours Sellers with more competition from Buyers and higher prices. Prices will continue to rise as consumer confidence gathers momentum and brings with it more Buyers.