Market Improving For Homeowners & First Time Buyers
As we head into the last quarter, the real estate market continues to improve for First Time Buyers, as well as Homeowners (who would like to sell their current homes and "move up"). As more and more investors pull back, first time buyers are able to successfully compete for homes. In recent years all-cash investors have been capitalizing on the available inventory, making it difficult if not impossible for first time buyers and other non-cash buyers to compete. A recent National Association of Realtors survey (NAR) shows that the share of investor sales dropped from 16% in July to 12% in August. About 23% of buyers interviewed reported that their last transaction was cash, down from 29% in July.
The changes in the market have been good for homeowners too. A big reason - the number of distressed sales continues to decline. In fact, the NAR's July Existing Home Sales Data indicated that the number of homes sold in distress - meaning foreclosures and short sales - was at 9%! This is the lowest recorded number since NAR started tracking distressed sales in October 2008! A year ago distressed sales accounted for 15% of the market.
Locally, there are less than a dozen homes actively for sale under $75,000. Further, there are only 8 homes currently under contract under $75,000. Although this price point does not mean that all homes listed under $75K are distressed, (there is a distressed sale listed for $244,900 on Forest Cliff!) it does help provide some apple-to-apple comparisons to show how our market continues to recover.
Stay with me here! Year to date (through October 22) there has been a total of 65 sales under $75K. During this same period last year there were 78 sales. Of more significance, however is the change in the average sales price. Through October 22nd there has been a total of 367 sales, with an average sales price of $154,237. During the same period last year-- 352 sales with an average price of $145,360. This is a solid increase of nearly $10K, more than 5% over the previous year!
Investors are in the market to make money. As the available distressed inventory shrinks, investors move back to the sidelines. This allows first timers back in to the market. In return, the average sales price begins to increase, and homeowners who were under water begin to gain some equity back. This allows homeowners the ability to sell, and become move-up buyers, which in return helps the average sales price to continue to improve. The investors that are still in the market are aiding the recovery too. Several recent rehabs and remodels have been top-quality, and have sold for top dollar, helping raise the average sales price and add immediate value to neighborhoods.
Lakewoodites can access local stats on housing, the economy, and quality of life at www.ClevelandsRealEstateSource.Info.
Lakewood seems to be in good balance right now, with the right mix of investors and first time buyers. The proof is in the numbers, as Lakewood looks to finish another strong year in sales!
Chris Bergin is a licensed real estate agent with Berkshire Hathaway Lucien Realty in Lakewood and can be reached at Chris@ChrisBergin.com.