Fayetteville NC Real Estate
Market Report 1st Quarter 2011 For the period ending March 31, 2011
Š 2011 Altagracia, LLC
Executive Summary The Fayetteville, NC real estate market continues to produce mixed results. Overall, sales are almost 40% off of the highs of 2006. They are about 10% higher than last year, but are still below the average of the last 12 years. Existing homes are selling at a much slower rate, but new construction is selling markedly better. In the 1st Quarter of 2011, a total of 718 existing homes were sold. That represents a drop of about 45% from the high sold in the 1st Quarter of 2006. However, it is an increase of about 5% from the 1st Quarter of last year, 2010. That might appear to be positive news for sellers, but the strength in the market is in new construction sales. For the same period, 1st Quarter 2011, a total of 464 newly constructed homes were sold. That’s a drop of 28% from the market high in 2006 but an increase of over 17% from last year. The best indicator of the strength of the market is the absorption rate. Both existing and new construction rates slowed over the last 3 months, mostly attributable to the seasonal nature of home sales. Existing home sales continue to lag well behind indicating it is a strong buyers market. New construction is relatively balanced in price ranges below $250,000. Š 2011Altagracia, LLC
Existing Home Sales Jan 1 - Mar 31 each year 2000 thru 2011
1400 1316 1200
1154 1065
1018
1000 870
605
600 478
Average 825
838
800
683
656
718
495
400
200
0 2000
Š 2011 Altagracia, LLC
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
New Construction Home Sales Jan 1 - Mar 31 each year 2000 thru 2011
700 646 600 557 526
500
486
480
400
395 303
300
200
464
200
224
301
237
100
0 2000
Š 2011 Altagracia, LLC
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Average 419
Existing vs. New Construction Home Sales as a percentage of total sales in the market
P e r c e n t o f S a l e s
75
65
55 Existing Homes 45
New Construction
35
25 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
The story of the Fayetteville real estate market over the last 3 or 4 years has been the increase of new construction home sales over existing home sales. As a percentage of total sales, new construction is increasing its market share. This is because buyers are showing they prefer new construction, not because there is a shortage of existing homes for sale. Š 2011 Altagracia, LLC
Market Absorption Rates Supply and Demand
It is difficult to judge how strong sales are in a market based solely on the number of homes sold. A better technique is to examine the absorption rate for a particular neighborhood. Absorption rate is a measure of the inventory of homes for sale in the market. It is expressed by how many months it will take to sell, or “absorb” the homes currently for sale. Here’s a short example (courtesy of Zan Monroe, Senior Instructor, Council of Residential Specialists): “If 12 homes sold in the last 12 months, that means the market will absorb 1 house per month, on average. If there are 10 homes currently on the market, there is a 10 month supply.”
© 2011 Altagracia, LLC
Market Absorption Rates Supply and Demand
The National Association of Realtors® considers that a 6 month supply of homes is a “balanced” market. If there is more than a 6 months supply of homes for sale, it is a buyers market because there are more homes available then there are buyers for them. If there is less than 6 months supply of homes, it is a sellers market. © 2011 Altagracia, LLC
Absorption Rates Over Time
Existing Homes – All of the Fayetteville NC Market
Period Ending March 31, 2011
Existing Homes Fayetteville Region
Past 3 Months
Past 6 Months
Past 12 Months
Price Range
Avg Homes Sales per # Active Monthly Sold Month Listings Supply
Avg Homes Sales per # Active Monthly Sold Month Listings Supply
Avg Homes Sales per # Active Monthly Sold Month Listings Supply
< $100,000
324
108.00
821
7.60
596
99.33
821
8.27
1269
105.75
821
7.76
$100,000 - $149,999
207
69.00
923
13.38
464
77.33
923
11.94
1110
92.50
923
9.98
$150,000 - $199,999
127
42.33
801
18.92
276
46.00
801
17.41
705
58.75
801
13.63
$200,000 - $249,999
37
12.33
375
30.41
98
16.33
375
22.96
241
20.08
375
18.67
$250,000 -$299,999
25
8.33
267
32.04
51
8.50
267
31.41
155
12.92
267
20.67
$300,000 - 499,999
21
7.00
303
43.29
46
7.67
303
39.52
135
11.25
303
26.93
$500,000 - and up
3
1.00
119
119.00
8
1.33
119
89.25
18
1.50
119
79.33
Data provided by Fayetteville Regional Association of Realtors©. Information is deemed reliable but not guaranteed.
© 2011 Altagracia, LLC
Absorption Rates Over Time
Existing Homes â&#x20AC;&#x201C; All of the Fayetteville NC Market
120
M o 100 n t 80 h s
Past 3 Months
60
S u p p l y
Past 6 Months Past12 Months
40
Balanced Market 6 months
20 0 < $100,000
$100,000 $149,999
$150,000 $199,999
$200,000 $249,999
$250,000 $299,999
$300,000 $499,999
$500,000 - and up
Absorption rates for the past 3 and 6 months are higher than those for the past 12 months, meaning that homes are selling slower. That is not unusual, as the spring and summer months are stronger for sales in this area. In every price range, however, it is still a buyers market, as there is much more inventory available than the market requires. Š 2011 Altagracia, LLC
Absorption Rates Over Time
New Construction– All of the Fayetteville NC Market Period Ending March 31, 2011
New Construction Fayetteville Region
Past 3 Months
Past 6 Months
Past 12 Months
Price Range
Avg Homes Sales per # Active Monthly Sold Month Listings Supply
Avg Homes Sales per # Active Monthly Sold Month Listings Supply
Avg Homes Sales per # Active Monthly Sold Month Listings Supply
< $100,000
1
0.33
12
36.00
1
0.17
12
72.00
2
0.17
12
72.00
$100,000 - $149,999
63
21.00
134
6.38
147
24.50
134
5.47
318
26.50
134
5.06
$150,000 - $199,999
191
63.67
454
7.13
392
65.33
454
6.95
894
74.50
454
6.09
$200,000 - $249,999
152
50.67
396
7.82
280
46.67
396
8.49
679
56.58
396
7.00
$250,000 -$299,999
33
11.00
157
14.27
73
12.17
157
12.90
181
15.08
157
10.41
$300,000 - 499,999
27
9.00
91
10.11
56
9.33
91
9.75
120
10.00
91
9.10
$500,000 - and up
4
1.33
11
8.25
9
1.50
11
7.33
15
1.25
11
8.80
Data provided by Fayetteville Regional Association of Realtors©. Information is deemed reliable but not guaranteed.
© 2011 Altagracia, LLC
Absorption Rates Over Time
New Constructionâ&#x20AC;&#x201C; All of the Fayetteville NC Market
M o n t h s S u p p l y
18 16 Past 3 Months
14
Past 6 Months
12
Past 12 Months
10 Balanced Market 6 Months
8 6 4 2 0 < $100,000
$100,000 $149,999
$150,000 $199,999
$200,000 $249,999
$250,000 $299,999
$300,000 $499,999
$500,000 - and up
Absorption rates for new construction for the past 3 and 6 months are generally higher than those for the past 12 months, meaning that homes are selling slower (probably seasonal.) The new construction market is balanced in the most popular price ranges, under $250,000. Builders are careful to not over-build, and have offered many incentives to buyers. Š 2011 Altagracia, LLC
Comparison
Existing Home Sales and New Construction Sales
Period Ending March 31, 2011
Existing Homes Fayetteville Region
Period Ending March31, 2011
New Construction Fayetteville Region
Past 12 Months
Price Range
Homes Sold
Avg Sales per Month
# Active Listings
$150,000 - $199,999
705
58.75
801
$200,000 - $249,999
241
20.08
$250,000 -$299,999
155
12.92
Monthly Supply
Past 12 Months
Price Range
Homes Sold
Avg Sales per Month
# Active Listings
Monthly Supply
13.63
$150,000 - $199,999
894
74.50
454
6.09
375
18.67
$200,000 - $249,999
679
56.58
396
7.00
267
20.67
$250,000 -$299,999
181
15.08
157
10.41
In several of the more popular price ranges, newly constructed homes are selling more, and faster, than existing homes. Buyers are demonstrating that they favor the “new” factor and the amenities offered in many newly constructed homes. This puts additional pressure on home sellers to price their home competitively and to ensure their home is in top condition for sale, as it will have to compete with new construction for buyers’ attention. © 2011 Altagracia, LLC
Comparison
Existing Home vs. New Construction - $150,000 to $299,000
Existing Homes
New Construction
1443, 89%
1023, 79%
184, 11%
Active
Active
Pending
Pending 267, 21%
The mid-range segment of the housing market, $150,000 to $299,999 is dominated by new construction sales. The current inventory of homes for sale is quite large, with over 2,900 homes for sale in these price ranges. As these charts clearly show, a larger number of new homes in these price ranges are being sold. Buyers are obviously choosing new homes over existing ones. These charts also show that there is no shortage of existing homes for sale. Š 2011 Altagracia, LLC
Absorption Rates Sample Neighborhoods
Absorption rates can be calculated for any neighborhood, and are the most accurate indicator of how to price a home for sale or purchase. For a home to be sold within a certain time period, it must be priced at the front of the market, given its location and condition.
The following 3 pages show absorption rates for 3 sample areas or neighborhoods: the Terry Sanford School District, zip code 28303, and Haymount. If you want to know the absorption rates for any particular neighborhood, send an email to me at jumperdj@earthlink.net or call Julissa Jumper at (910) 644-0303.
Š 2011 Altagracia, LLC
Absorption Rates
Existing Homes - Terry Sanford School District
Period Ending March 31, 2011
Terry Sanford School District
Price Range
Past 3 Months
Homes Sold
Avg Sales per Month
Past 6 Months
# Active Monthly Homes Listings Supply Sold
Avg Sales per Month
Past 12 Months
# Active Monthly Homes Listings Supply Sold
Avg Sales per Month
# Active Monthly Listings Supply
< $100,000
19
6.33
43
6.79
36
6.00
43
7.17
69
5.75
43
7.48
$100,000 - $149,999
12
4.00
43
10.75
20
3.33
43
12.90
44
3.67
43
11.73
$150,000 - $199,999
10
3.33
58
17.40
26
4.33
58
13.38
66
5.50
58
10.55
$200,000 - $249,999
7
2.33
53
22.71
16
2.67
53
19.88
41
3.42
53
15.51
$250,000 -$299,999
2
0.67
37
55.50
7
1.17
37
31.71
26
2.17
37
17.08
$300,000 - 499,999
9
3.00
50
16.67
23
3.83
50
13.04
38
3.17
50
15.79
$500,000 - and up
3
1.00
46
46.00
11
1.83
46
25.09
15
1.25
46
36.80
Š 2011 Altagracia, LLC
Absorption Rates
Existing Homes - Zip Code 28303
Period Ending March 31, 2011
Zip Code 28303
Price Range
Past 3 Months
Homes Sold
Avg Sales per Month
Past 6 Months
# Active Monthly Homes Listings Supply Sold
Avg Sales per Month
Past 12 Months
# Active Monthly Homes Listings Supply Sold
Avg Sales per Month
# Active Monthly Listings Supply
< $100,000
25
8.33
72
8.64
47
7.83
72
9.19
100
8.33
72
8.64
$100,000 - $149,999
14
4.67
69
14.79
39
6.50
69
10.62
84
7.00
69
9.86
$150,000 - $199,999
4
1.33
37
27.75
21
3.50
37
10.57
39
3.25
37
11.38
$200,000 - $249,999
1
0.33
33
99.00
3
0.50
33
66.00
15
1.25
33
26.40
$250,000 -$299,999
1
0.33
24
72.00
3
0.50
24
48.00
12
1.00
24
24.00
$300,000 - 499,999
5
1.67
20
12.00
15
2.50
20
8.00
23
1.92
20
10.43
$500,000 - and up
1
0.33
19
57.00
5
0.83
19
22.80
6
0.50
19
38.00
Š 2011 Altagracia, LLC
Absorption Rates Existing Homes â&#x20AC;&#x201C; Haymount
Period Ending March 31, 2011
Neighborhood Haymount
Price Range
Past 3 Months
Homes Sold
Avg Sales per Month
Past 6 Months
# Active Monthly Homes Listings Supply Sold
Avg Sales per Month
Past 12 Months
# Active Monthly Homes Listings Supply Sold
Avg Sales per Month
# Active Monthly Listings Supply
< $100,000
5
1.67
3
1.80
5
0.83
3
3.60
12
1.00
3
3.00
$100,000 - $149,999
8
2.67
24
9.00
9
1.50
24
16.00
16
1.33
24
18.00
$150,000 - $199,999
6
2.00
21
10.50
12
2.00
21
10.50
20
1.67
21
12.60
$200,000 - $249,999
3
1.00
11
11.00
7
1.17
11
9.43
14
1.17
11
9.43
$250,000 -$299,999
1
0.33
12
36.00
4
0.67
12
18.00
9
0.75
12
16.00
$300,000 - 499,999
0
0.00
12
n/a
3
0.50
12
24.00
5
0.42
12
28.80
$500,000 - and up
1
0.33
8
24.00
2
0.33
8
24.00
4
0.33
8
24.00
Š 2011 Altagracia, LLC
Summary There are far more houses for sale in the Fayetteville, NC real estate market than will be able to sell in the next 6 months. The implications of that for sellers is that they must maintain, price, and market their home at the very front of the market if they have a realistic chance of selling it within their time frame. The task is made more difficult because of the competition from new construction homes, many offered with builder incentives. That reality is tempered by the fact that real estate sales are very localâ&#x20AC;&#x201D;some homes in popular neighborhoods continue to sell at a favorable pace. Sellers should check with their real estate agent to determine how their home compares to others, and what the absorption rates are for homes similar to theirs. For buyers, the opposite is true. There is an incredible selection of homes available right now, mortgage rates are very low, and it is an ideal time to purchase a home. A note of caution, howeverâ&#x20AC;&#x201D;homes are generally not losing value and a buyer should not expect to purchase a home for much less than it is worth. Many sellers will opt to put their homes on the rental market instead of selling if their home does not sell in a reasonable amount of time. Š 2011 Altagracia, LLC
Fayetteville NC Real Estate
If you have questions about this report, or want to know more information, please call Julissa Jumper at (910) 644-0303. The Julissa Jumper Real Estate Team Keller Williams Realty 639 Executive Place Suite 100 Fayetteville, NC 28305
Š 2011 Altagracia, LLC