Real Estate Report presented by Christine Schneider - Broker

Although sales of single-family, re-sale homes in January were the highest for any January since 2007, the lack of inventory doesn’t bode well.

With 259 active listings on the market, we have only 73 days of inventory. In a normal market we would see around 180 days.

One would expect with the surge in appreciation over the past eighteen months, there would be more sellers on the market. Not!

Let’s run down the reasons for the lack of inventory, and why it will continue for the foreseeable future.

First, it’s the economy! The local economy is strong.

Second, taxes! Property taxes are based on the sales price and can only be adjusted upward each year by 2% or the rate of inflation, whichever is lower. Only when the home is sold can it be re-assessed to the sales price. Home owners are staying put.

Then there’s capital gains taxes when the property is sold. With all the appreciation in the area, that could be substantial, regardless of the $500K exclusion for married couples.

Third, where are sellers going to move to? Moving up in the local market incurs a hefty increase in property taxes, not to mention the higher price of the new home.

Fourth, many homes that would be coming onto the market because of the owners’ death are being moved into by their children. This gives them two benefits: their property taxes stay the same and their basis in the home is stepped up to market value.

Finally, why move when the home is appreciating so much and fueling the home owners’ net worth?

January Market Statistics

Year-Over-Year

• Median home prices increased by 24.0% year-over-year to $620,000 from $500,000.
• The average home sales price rose by 37.1% year-over-year to $779,746 from $568,792.
• Home sales rose by 3.9% year-over-year to 107 from 103.
• Active listings fell 3.7% year-over-year to 259 from 268.
• Sales price vs. list price ratio rose by 1.4% year-over-year to 98.8% from 97.5%.
• The average days on market rose by 0.6% year-over-year to 64 from 64.

Compared To Last Month

• Median home prices improved by 1.6% to $620,000 from $610,000.
• The average home sales price rose by 14.4% to $779,746 from $681,837.
• Home sales Down by 5.3% to 107 from 113.
• Active listings increased 4.9% to 259 from 247.
• Sales price vs. list price ratio dropped by 0.1% to 98.8% from 98.8%.
• The average days on market increased by 32.1% to 64 from 49.