Again we are faced with record sales volume coupled with record low inventory. This seems to be the new fad in town. As I look at the report, questions arise as to what are some of the factors creating today’s situation. Thankfully, employment stability is a major factor, but what else is going on behind the numbers? There have to be some major shifts in the markets foundation in order to set a 3rd consecutive 8-year monthly high in sales volume…and a 1st quarter YTD sales total not seen since 2005.
One of the first things I checked was the weekly Notice of Default list. This is the weekly list of homeowners who are at least 4 months delinquent on their mortgage payment and their lender has filed the first notice of its intent to foreclose. I had noticed that the list had been shrinking of late and we have heard reports of Colorado’s foreclosure decline, but by how much? For 5 reports that came out in March of 2012 there was an average of 473 notices filed each week. This is a leading indicator and it’s nearly impossible to tell how many of these get cured, get sold, get a short-sale closed, or get foreclosed upon. If we look at the filings in the 5 reports issued in March of 2013 there were an average of just 256.
The current Notice of Default list is nearly half as long as it was a year ago. With this in mind, it would be completely logical to determine that there have to be at least half the number of distressed properties – people selling short and foreclosures – hitting the market. For sake of perspective in where we have come over the past few years, consider this: the average notices filed in March of 2010 was 808 file per week!
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Another thing I took a look at were the average and median sales prices. Not how much they have moved up over the past year, but what is happening out there to make them move. It’s kind of an interesting study. In March of 2012 there were 41 sales from below the median price of $227,500 and there were only 78 sales that month. In other words, more than half the monthly sales total was below the average price. In 2013, there were 20% fewer, or 33 sales, from below that same average price in 2012. In similar terms as before, 33% of March ’13 sales were in the same price range as ’12. The activity has moved up the pricing spectrum. The numbers don’t show price increases as much as they show where the activity is. Please let your sellers in on this when they start getting the “it’s a seller’s market” attitude.
The Predictor says 109 for April. I think that will be a little low. What do you think?