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Fayetteville NC Real Estate

Market Report For the period ending January 31, 2011

Š 2011 Altagracia, LLC


Executive Summary The Fayetteville, NC real estate market has slowed considerably from the heights of the market in 2006 and 2007. Sales are almost 40% off of the highs. Both existing homes and newly constructed homes continue to sell, but existing homes are selling at a much slower rate. In 2010, a total of 3,576 existing homes were sold. That represents a drop of about 37% from the high of 5,708 houses sold in the year 2006. It is a drop of about 7% from the previous year, 2009. For the same period, 2010, a total of 2,156 newly constructed homes were sold. That is a drop of 20% from the market high in 2006 but only a drop of .5% from 2009. The best indicator of the strength of the market is the absorption rate. Both existing and new construction rates are slowing down over the last 6 months, partially 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 - Dec 31 each year 2000 thru 2010

6000 5708

5000 4763

4914

4893 4553

4000

3820 3552

3576

3061

3000

2685 2309 2000

1000

0 2000

Š 2011 Altagracia, LLC

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010


New Construction Home Sales Jan 1 - Dec 31 each year 2000 thru 2010

3000 2702 2500

2417

2307

2000

2063

2166

2156

1756 1562

1500 1217 1067

1000 835 500

0 2000

Š 2011 Altagracia, LLC

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010


Existing vs New Construction Home Sales as a percentage of total sales in the market

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. 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 January 31, 2011

Existing Homes Fayetteville Region

Past 12 Months

Past 6 Months

Past 3 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

1263

105.25

817

7.76

583

97.17

817

8.41

268

89.33

817

9.15

$100,000 - $149,999

1120

93.33

835

8.95

486

81.00

835

10.31

223

74.33

835

11.23

$150,000 - $199,999

697

58.08

707

12.17

302

50.33

707

14.05

125

41.67

707

16.97

$200,000 - $249,999

245

20.42

335

16.41

114

19.00

335

17.63

55

18.33

335

18.27

$250,000 -$299,999

153

12.75

217

17.02

53

8.83

217

24.57

23

7.67

217

28.30

$300,000 - 499,999

141

11.75

243

20.68

56

9.33

243

26.04

25

8.33

243

29.16

$500,000 - and up

18

1.50

109

72.67

8

1.33

109

81.75

4

1.33

109

81.75

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

90

M o n t h s S u p p l y

80 70 60 50

Past 12 Months

40

Past 6 Months

30

Past 3 Months

20

Balanced Market 6 months

10 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 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 January 31, 2011

New Construction Fayetteville Region

Past 12 Months

Past 6 Months

Past 3 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

2

0.17

13

78.00

2

0.33

13

39.00

0

0.00

13

$100,000 - $149,999

306

25.50

137

5.37

158

26.33

137

5.20

77

25.67

137

5.34

$150,000 - $199,999

915

76.25

481

6.31

414

69.00

481

6.97

209

69.67

481

6.90

$200,000 - $249,999

659

54.92

354

6.45

316

52.67

354

6.72

139

46.33

354

7.64

$250,000 -$299,999

192

16.00

144

9.00

78

13.00

144

11.08

36

12.00

144

12.00

$300,000 - 499,999

118

9.83

93

9.46

57

9.50

93

9.79

31

10.33

93

9.00

$500,000 - and up

11

0.92

10

10.91

7

1.17

10

8.57

2

0.67

10

15.00

Data provided by Fayetteville Regional Association of Realtors©. Information is deemed reliable but not guaranteed.

© 2011 Altagracia, LLC

n/a


Absorption Rates Over Time

New Constructionâ&#x20AC;&#x201C; All of the Fayetteville NC Market

M o n t h s

18

S u p p l y

8

16

Past 12 Months

14

Past 6 Months

12

Past 3 Months

10

Balanced Market 6 months

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 January 31, 2011

Existing Homes Fayetteville Region

Price Range

Fayetteville Region

Past 12 Months

Homes Sold

Avg Sales per Month

Period Ending January 31, 2011

New Construction

# Active Listings

Monthly Supply

Price Range

Past 12 Months

Homes Sold

Avg Sales per Month

# Active Listings

Monthly Supply

$150,000 - $199,999

697

58.08

707

12.17

$150,000 - $199,999

915

76.25

481

6.31

$200,000 - $249,999

245

20.42

335

16.41

$200,000 - $249,999

659

54.92

354

6.45

$250,000 -$299,999

153

12.75

217

17.02

$250,000 -$299,999

192

16.00

144

9.00

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


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 your particular neighborhood, send an email to 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 January 31, 2011

Terry Sanford School District

Past 12 Months

Past 6 Months

Homes Sold

Avg Sales per Month

< $100,000

72

6.00

39

6.50

39

6.50

39

6.00

16

5.33

39

7.31

$100,000 - $149,999

40

3.33

44

13.20

12

2.00

44

22.00

5

1.67

44

26.40

$150,000 - $199,999

61

5.08

34

6.69

29

4.83

34

7.03

14

4.67

34

7.29

$200,000 - $249,999

34

2.83

28

9.88

18

3.00

28

9.33

8

2.67

28

10.50

$250,000 -$299,999

23

1.92

22

11.48

10

1.67

22

13.20

3

1.00

22

22.00

$300,000 - 499,999

25

2.08

35

16.80

13

2.17

35

16.15

10

3.33

35

10.50

$500,000 - and up

9

0.75

31

41.33

5

0.83

31

37.20

3

1.00

31

31.00

Price Range

Š 2011 Altagracia, LLC

# Active Monthly Homes Listings Supply Sold

Avg Sales per Month

Past 3 Months

# Active Monthly Homes Listings Supply Sold

Avg Sales per Month

# Active Monthly Listings Supply


Absorption Rates

Existing Homes - Zip Code 28303

Period Ending January 31, 2011

Zip Code 28303

Past 12 Months

Past 6 Months

Homes Sold

Avg Sales per Month

< $100,000

101

8.42

67

7.96

49

8.17

67

8.20

19

6.33

67

10.58

$100,000 - $149,999

80

6.67

69

10.35

41

6.83

69

10.10

21

7.00

69

9.86

$150,000 - $199,999

38

3.17

33

10.42

20

3.33

33

9.90

9

3.00

33

11.00

$200,000 - $249,999

14

1.17

16

13.71

7

1.17

16

13.71

3

1.00

16

16.00

$250,000 -$299,999

9

0.75

9

12.00

3

0.50

9

18.00

0

0.00

9

n/a

$300,000 - 499,999

15

1.25

10

8.00

9

1.50

10

6.67

7

2.33

10

4.29

$500,000 - and up

3

0.25

12

48.00

2

0.33

12

36.00

1

0.33

12

36.00

Price Range

Š 2011 Altagracia, LLC

# Active Monthly Homes Listings Supply Sold

Avg Sales per Month

Past 3 Months

# Active Monthly Homes Listings Supply Sold

Avg Sales per Month

# Active Monthly Listings Supply


Absorption Rates Existing Homes â&#x20AC;&#x201C; Haymount

Period Ending January 31, 2011

Neighborhood Haymount

Past 12 Months

Past 6 Months

Homes Sold

Avg Sales per Month

< $100,000

11

0.92

4

4.36

6

1.00

4

4.00

2

0.67

4

6.00

$100,000 - $149,999

12

1.00

24

24.00

4

0.67

24

36.00

2

0.67

24

36.00

$150,000 - $199,999

23

1.92

14

7.30

11

1.83

14

7.64

8

2.67

14

5.25

$200,000 - $249,999

13

1.08

8

7.38

7

1.17

8

6.86

4

1.33

8

6.00

$250,000 -$299,999

10

0.83

7

8.40

4

0.67

7

10.50

2

0.67

7

10.50

$300,000 - 499,999

8

0.67

7

10.50

3

0.50

7

14.00

2

0.67

7

10.50

$500,000 - and up

4

0.33

7

21.00

2

0.33

7

21.00

1

0.33

7

21.00

Price Range

Š 2011 Altagracia, LLC

# Active Monthly Homes Listings Supply Sold

Avg Sales per Month

Past 3 Months

# Active Monthly Homes Listings Supply Sold

Avg Sales per Month

# Active Monthly Listings Supply


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 vey low, and it is an ideal time to purchase a home. A note of caution, howeverâ&#x20AC;&#x201D;homes are 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


Fayetteville, NC Real Estate Market Report - JAN 2011