April Sullivan Sales Data Posted

Hey, everybody, my May Current Market Conditions Report is posted. Things are starting to look up. There were 36 closed single family sales in the Sullivan MLS in April, compared to a devastating 23 in March. Sales and prices both continue down from a year earlier, but remember that early to mid 2007 was the peak of the market. The median sales price for the 3 months ending April 30th, at $150,000, is statistically equal to March's $150,750, and the average actually moved slightly upwards to $207,657. Buyer interest was up in April (I had a full appointment schedule most April weekends, and yes, actually made some deals.)

I'm almost hesitant, though, to post anything here that the picture may be getting brighter, only to be slammed, beaten and clawed by the sky-is-falling pessimists. Maybe that should be a new blogging sport, "Extreme Pessimism". But I'm calling it as I'm seeing it, and right now it sure looks better than it did in January.

Comments

[Extreme Realism]

April to July is allways brighter in more ways than just data but that doesn't mean NYC folks are dumb enough to pay 300k for a 150k home or 250k for a 50k land parcel.

[David Knudsen]

You're absolutely right, extreme. New York buyers aren't dumb. That's why overpriced listings sit on the market, and well priced ones sell. That's the nature of a 'market'. Sellers put something out for sale, and buyers decide whether its worth it at that price, or choose something else with a better value profile. Over time, markets reach equilibrium. And what makes a $150,000 house worth $150K, and not $100K or $200K? Ultimately, buyers attach values to different features and attributes, and if those appealing features and attributes are scarce, and there is demand for them, the price will rise. Of course, you can sit around and wait until the house you think is only worth half of what its priced at today drops in value by 50% to buy it. You can also keep your car in the garage until gas is $2 a gallon again.

[Reg]

David,

I love the analysis. I also love when you post a link to listings that got lots of attention. Could you pick some good examples of right-priced real estate that sold in this period?

-Reg

[C. Woodward]

Good morning Dave,
Your commentary is *so* enchanting.

Ugh.

What make of rose color glasses do you wear?

Chuck
----------------------------

http://www.marketwatch.com/news/story/oil-futures-break-through-125/story.aspx?guid=%7BB1E3425C%2D1489%2D40FA%2DAA68%2DFCFBF50EA0AF%7D

Oil futures break through $125, approach $126

By Steve Goldstein
Last update: 7:27 a.m. EDT May 9, 2008Print RSS Disable Live Quotes

LONDON (MarketWatch) -- Oil futures blitzed past the $125 a barrel mark in electronic trading as New York traders started to get in, rising as high as $125.98 a barrel. In more recent trade, oil traded at $125.55, up $1.86. Oil futures have climbed nearly $10 this week. Community

and

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMZwtzYiMPgg&refer=home

Oil Rises to Record Above $125 as Nigeria Cuts Curb U.S. Supply

By Grant Smith

May 9 (Bloomberg) -- Oil rose to a record above $125 and was set for the biggest weekly gain in more than a year on speculation reduced exports from Nigeria will curb U.S. supplies during the peak summer driving season...

[Extreme Realism]

David, comparing SC RE prices to gas prices is not a good analogy. RE is more closely compared to stocks than to gas prices , at least in respect to price behavior. Waiting for a stock to come down 30-50% to jump in and buy is normal. $2 gas will never come back as that is a core inflation built in but a home on 6 acres for 150K will return. Your spring picture will allways be rosier than the slow long winters but the yearly trend will continue down down down for the next few years.

[C. Woodward 'Woodchuck' Woodie]

For every property that is sold in Sullivan - five new listings come on the market adding to inventory bloat.

Very lopsided.

30 Day:

New Listings:
295

Price Change in Existing Listings:
278

SOLD:
55

~Chuck

[John]

Generally speaking real estate is a reasonable inflation hedge. Plus if your property has some tillable land, pasture, or timber you have further income potential.

[Mal]

The problem with getting too enthusiastic over the jump in mean sales prices is that the mean has proven to be a misleading indicator several times for Sullivan county sales in recent years. A review of David's posted data shows that for about two years following May '03, the mean and median rose in almost lockstep (mean was continuously about $20-30k > median), but thereafter the mean became much more volatile. The exuberant peaks in the summer of '06 and '07 occurred only in the mean, and were not sustained for long. The current mean is similar to values seen in the year from Fall '05 - Fall '06, but the current median is at values not seen since Fall '04. Perhaps the median has stabilized now, but it is worth noting that (1) there were several points of brief stabilization or reversal as the median doubled from early '03; and (2) the slower decline in the median since Nov '07 is actually remarkable similar in slope to the steady rise from '03.

[Chuck]

For every property that is sold in Sullivan - five new listings come on the market...
================

Like a put / call ratio?

There are more sellers than buyers.

A bearish sign.

Jaye P. Morganish

[Catskill Farms]

Just want to put it out there that Chuck from Catskill Farms is not responsible for any of the above comments, but do, as always, appreciate the single-minded and diligent efforts at discrediting not only our 32 original homes sold over the past 3 years but also our current 8 house waiting list.

[Catskill Farms]

DK - what would add a lot of perspective is a graph of april prices and sales activity for the past 5 years. That might be a tall order, but if you have the info handy, it would be invaluable.

[Reg]

David,

You might want to start editing and deleting unproductive comments, banning IP addresses, or even using a list of banned terms to keep people from misusing the comments section of your site. It's your site, after all. You have no obligation to keep those comments up.

The same goes for your gay Sullivan County boards. Great idea, but because of the spam comments, it's not really being used properly.

Best,

Reg

[David Knudsen]

Gotta respond to some of the comments here.
First, I'm not wearing rose colored glasses. In fact, if you've followed this blog over time, you'll notice that I tend to be more of a pessimist than an optimist. But there have been signs of improvement in the past couple of months, both in terms of new activity and closed sales. Sure, numbers are down from the previous year, but there seems to be a pickup in some segments, not all. It seems, though, that a lot of the extreme pessimists who visit this blog are only 'happy' if the numbers keep getting worse, and support their belief of a real estate Armageddon.

Regarding the 295 new listings stated by Woodshuck, in April in the Sullivan MLS I only show 252, and of those, 151 are single family homes, the category I track. But new listings don't mean new to market. A common scenario right now is that sellers, who have been unsuccessful in selling their property with one agent move the listing to another agent. That shows up as a 'new listing', even though its the same property. Some agents also 'relist' the property, letting the existing listing expire and entering it in the MLS as a new listing, which gives it a new, higher MLS number with a more recent listing date. This reduces the apparent days on market. If the market was dead, and I wasn't busy out showing property, I would have the time to go, listing by listing, and come up with an actual number of truly new listings. I would venture, though, that at least 25% of those 151 new single family listings are somehow relists of property that has been on the market. I don't see how you can call it inventory bloat when the number of single family listings on the market at the beginning of May was 1087, up only 4.8% from the 1,038 at the beginning of April. (The number in May, 2007 was 1,077.) Also, we are somewhat a seasonal market, and the pattern is that the number of listings starts to climb in April and peak in August/September, and then drop off until the following April.

Regarding the average, it is more volatile than the median because it is very sensitive to a few large sales. I've always relied on the median as a better overall indicator of trends in the short to medium term, because it fluctuates less month to month. But I think both numbers are important over the long term.

I'm not getting overly enthusiastic here about a bumpin the average. My main point in the current market conditions report is that of the 3 indicators I track, sales, median price and average price, all 3 stopped their slide in April after some pretty steep declines starting last fall. Make of that what you will.

I think one thing people have missed, if they're accusing me of being a rose colored optimist with my head in the sand, is that if you read the Current Market Conditions report I've stated pretty clearly that average and median sales price have pulled back to levels we saw in 2005. Nowhere have I even implied we're galloping back to 2007 peaks. But buyers do seem to be responding to better prices.

And I do understand that gas prices aren't analogous to real estate prices. I was responding to extreme's comment. Something that keeps getting posted on this board, in one way or another, is that people are fools if they don't wait for housing prices to be half of what they are today. If that's your belief, then just don't buy real estate.

[David Knudsen]

One more point, about the relationship of inventory to actual sales. Buyers today are much more selective than during the frenzied market years. From 2005 to 2007, people wanted into real estate, and would accept significant compromises to get something, anything at a price they could afford or wanted to pay. Houses with few compromises that appealed to second home buyers were in great demand, and prices on them rose. More 'affordable' (however you want to use that term) houses often had substantial compromises. For example, a buyer interested in a charming renovated farmhouse on a few acres with privacy on a quiet country road might have had to pay $400,000 or more — and even then, might end up in a bidding war. But if they would be willing to accept a farmhouse on a busier main road, or one with low ceiling heights, they could find something in the $250,000 range. Lots of houses involving compromises sold.

Today, buyers I'm working with are much more selective, and less willing to accept those same compromises, even if a house is priced well below other houses with fewer issues. There are probably a half dozen or more cute farmhouses on the market with low ceiling heights, and another dozen on busier roads that just aren't moving - at least at the prices being asked for them.

[Catskill Farms]

David - per the low ceilings issue - if the first floor is ok, but the 2nd floor is ceiling is low, it really isn't that expensive (compared to loss of value with low ceilings) to raise the structural collar ties up, creating a vaulted ceiling and raising the height as much at 3-4 feet.

We are renovating a 1860's farmhouse in Eldred and it changed the house completely. What we had that made it possible was 7'+ first floor ceilings, and not deal-breaker 6'6".

The only problem you run into with this suggestion is once you start messing around with an old house, it's hard to stop - why don't we re-wire, re-plumb, add a little insulation while we are it scenarios. But in the end it worth 10x the standard kitchen or bath redo.

[David Knudsen]

Chuck, I agree its fixable particularly if its the second floor. But comapred to a few years ago, most buyers I'm seeing don't want to do much, if any, work. I have trouble convincing someone that its not that big a deal to rip out ugly old paneling and put in sheetrock, much less raise the second floor of a house.

[Catskill Farms]

Couldn't agree more - the majority of 2nd home buyers, given a quality option, would much rather barbecue the first weekend, not begin interviewing contractors.

Best case scenerio I've seen is where the house doesn't need work, but there is an outbuilding or garage that can turned into a neat carraige house, writers shack, or meditation studio over time.

[D Lewell]

Is it my imagination or are houses (more charming ones) in Ulster becoming more moderately priced (in the 200-300 range) than in Sullivan? Just more houses there in general...so more quickly adapting to price changes?