Friday, July 7, 2017
Real estate sales volume on the island of Tierra Verde in the 2nd quarter of 2017 has out-paced the rate of sales in any 2nd quarter over the last 10 years. (That was not true of the first quarter which lagged behind the 1st quarters of 2015 and 2013.) Not only that, but the 2nd quarter performance buoyed year-to-date sales rates so much that we are now experiencing the most brisk sales pace we’ve had in 10 years.
However, it would be wise to keep in mind one important fact: During the 2nd quarter of the year 16 sales of the new condominium units at Sunset Pointe closed which I believe skews the sales data somewhat. But, if we back out those 16 transactions we still have rock-solid performance so far this year, and we can still claim the best 1st and 2nd quarter performance in the last 10 years.
If you read my blog post in April you know there is more to the story than only total numbers of sales. We should consider the “absorption rate” too. The absorption rate tells us that if the current rate of sales continues (based on activity over the prior 12 months) and no new listings enter the market, how many months it would take to sell the entire inventory of homes on the market at that point in time.
The chart above illustrates the rate of housing inventory absorption (i.e., the number of months it would take to sell all residential properties currently on the market in Tierra Verde). Sellers would love to see an absorption rate of 2 or 3 months and buyers would love an absorption rate of 9 or 10. But an absorption rate of 6.1 is considered “balanced” and favors neither sellers nor buyers. At the end of March the absorption rate was 7.5 months so we are headed toward an pace favorable to sellers. But we will have to wait to see the data at the end of the third quarter!
If you are on the fence about listing your home for sale, give me a call and we will evaluate your specific situation together.
Dan Reichard, Realtor ®
Smith & Associates Real Estate