Coldwell Banker Schmitt's Real Estate Report
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Volume 16, Number 1
Keys-Wide Overview Of Sales And Listings For All Property Types
Properties For Sale & Properties Listed
The total of 2,881 Properties Sold during 2016 was 11% less than during that same period in 2015. That reduction ended the streak that started with 2009’s 1,560 sales of exceeding each previous year’s sales total. (See the following feature for more information concerning the decline in number of sales.)
The 2,781 Properties For Sale at the end of December 2016 was 12% more than 2,488 on that date in 2015 though it is 55% reduction from the peak of 5,084 in March of 2007. This is the single, most important measure of our slowing market. The number of sales cannot increase over prior periods until the number of listings decreases over those prior periods.
Average Sale Price & Average List Price
The Average Listed Price (ALP) for 2016 of $855K is up 3% from $828K last year. The ALP peak was $990K at the end of 2007; however, the ALP has steadily increased since 2012’s low of $695K.
The $576K Average Sale Price (ASP) was 9% more than the $527K for that same time frame last year, which places the 2016 ASP in the range of 2008’s $588K average price. The peak to date for this century was $805K in 2006, with a low of $273K in 2000. (The following feature also carries additional ASP information.)
Dollar Value of Sales 2016 vs. 2015
The Dollar Value of Sales (DVS) declined 3% compared to 2015 primarily due to the 11% decrease in number of sales. However, this is the second consecutive year of sales exceeding the billion-dollar mark, last achieved in 2006. The record year occurred in 2005 when the ASP was $782K and 2,752 properties sold. The lowest DVS came in 2008 resulting from 1,166 sales with an ASP of $588K.
The Sale Price-to-Original List Price (SP/OLP) improved 2% to establish a new high. (The OLP/SP compares the sale price of the property to the list price of the property at the time it first came on the market and provides a measure of the difference between many sellers’ initial list price and the market price acceptable to buyers.)
Sale Price-to-Original List Price vs. Sale Price-to-Final List Price
The Sale Price-to-Final List Price (SP/FLP) rose 1% from 93.71% last year. (The FLP/SP compares the sale price of the property to the list price of the property at the time the contract was written instead of the time the property was first listed, and reflects the average percentage of the final listed price that buyers are paying for properties that have sold.)
The margin between the OLP/SP and FLP/SP indicates, on average, that sellers can anticipate a price reduction of about 3.6% from their original listing price prior to receiving the buyer’s offer. The previous low of 7% occurred in 2001 and 2005, with the largest variance being 25% at the end of 2009. Similarly, sellers and buyers today can expect the contract price to be 5.6% less, on average, than the final list price and about 9% less than the original list price. From 2001-2005, the average margin for FLP/SP was nearly 5% with the high being 13% for 2009 when the OLP/SP was 37.5%.
Average Days to Sell & Months of Inventory
The Average Days to Sell (ADS) declined 9% to 143 days from the 158 of 2015. The peak was 264 days in 2012 with a low of 140 days in 2004. (ADS is a measure of the number of days between the date the property was listed and the date the sale closed.)
The 12 Months of Inventory (MOI) represents an increase of 33% from the 9 MOI at the end of last year; still behind the 55 months in March 2008. The lowest MOI to date was 3 and happened at the end of Q2 in 2004. (MOI provides a measure of the rate of sales versus the supply of properties and is also known as the "absorption rate.")
What Do the Numbers Forecast? The single best barometer of the market is the number of listings for sale. During 2016, there were 11% fewer buyers which contributed to the 12% increase in the number of sellers (listings) at the end of the year. Historically, the market hasn’t experienced an increase in the number of sales without a concomitant decrease in the number of listings. Otherwise stated, there is an inverse relationship between the number of buyers and the number of sellers. Accordingly, we don’t anticipate and can’t project a sustained increase in the number of sales in 2017 until we see a decrease in the number of listings for sale.
How is it That Average Sale Prices are Up
How does one reconcile an 11% reduction in the number of sales with a 9% increase in average sale price (ASP)? This situation prompted our look into which property types and price ranges were most impacted by the lower total sales, and which benefited from the increased average sales price. Since residential properties -- specifically Single Family, Condominium, Duplex, Half-Duplex and Townhouse -- accounted for 70% of all real estate sales in the Keys during 2016, we developed the two accompanying tables.
The first is for waterfront (WF) property types. The second is for non-waterfront (NWF) residential sales. The first column shows the various sales statistical categories in 2016 and 2015, and the percentage of change between them. The second through sixth columns segment by price bracket. For the waterfront chart, the seventh column combines all residential WF price brackets and the last column is for All Property Types across the Keys. The second chart is similar except for the last column which combines the activity of both WF and NWF properties.
Number of Sales: The WF chart shows a 26% drop for properties priced below $500K, a 4% increase in the $500K-$999K bracket, and 27%, 69% and 89% increases, respectively, in sales of properties within the three luxury ($1M+) price brackets. With 136 fewer sales in the lowest price bracket, though, the combined increase in sales of the remaining price brackets (69) only made up for 51% of the reduction in those sales.
The NWF properties chart shows similar results with a 21% reduction in the lowest price bracket, a 7% drop in the $1M-$1.999M price bracket, and just a 1% increase in the $5K-$999K price bracket. Even though the percentage of increase for the $2M+ price brackets was significant at 100% and 250%, respectively, the actual increase in number of sales -- 7 and 5 over 2015 -- when combined with the increase of only 2 in the $5K-$999K price bracket, equaled 14. This amounted to just 9% of the 135 fewer sales in the lowest price bracket. (Please note: the last column on the NWF chart combines the WF 6% and NWF 14% reductions in sales activity for an overall 9% reduction in total sales.)
The Average Sales Price (ASP) for properties in the less-than-$500K price range increased by 3% for WF and 8% for NWF properties even though both had fewer sales. The most significant change in ASP was the 17% reduction for the WF $3M+ category and the 11% decline for the NWF $2M-$2.9M category. Nevertheless, 2016’s 35% increase in sales of WF properties priced $1M+ created a 14% increase in the overall ASP for all WF properties. For NWF properties, the 11% growth in sales from $1M+ properties resulted in a 15% increase in the ASP for NWF properties. This is the same percentage increase for the combined ASP of the residential properties and the primary factor in the overall market ASP increasing by 9%.
Of interest is that the combined total listings for WF and NWF residential properties, 1,490, makes up 54% of all property types listings, while the sales of this group accounted for 70% of the sales of all property types in 2016, which shows that improved residential properties are selling at a higher rate than other property types.
The Months of Inventory (MOI) for all property types in 2016 was 12. It was 10 for the WF group, and a low of 6 for the below-$500K price bracket. NWF MOI is 8 with a low of 5 for the lowest price bracket. Consequently, the combined MOI for WF and NWF properties is 9, which is 25% lower than the 12 for all property types.Main take-aways: