By Charlie Young, President and CEO of ERA Real Estate
Median sales price. Days on market. List to sale price. Months of inventory.
All great data points for the real estate industry and important ones to monitor. But I’m always looking for the sweet spot.
On the heels of NAR’s Existing Home Sales report and today’s Case-Shiller Index report, both of which seem to indicate that the market improvements of last year will continue into 2014 although at a more moderate pace, I uncovered a few sweet spots in markets across the country that are worth noting.
This is an area which does a good job of illustrating overall how the market is improving. The nation’s second largest banking center after New York, the city and surrounding area is growing as the banking industry gains momentum.
The average sales price is about $175,000 with increasing activity among all price points, but we are seeing a significant increase in the $200,000 to $300,000 range. This sweet spot seems to indicate an active move-up buyer market, but inventory $100,000 and below is moving the fastest, another interesting sweet spot for Charlotte.
In terms of market statistics, prices here increased 9 percent in 2013, and distressed properties have become a smaller part of the inventory mix, with 10% fewer distressed homes on the market over last year.
Scott Wilkinson of Wilkinson Real Estate and Associates ERA Powered expects that the reduced number of distressed properties, an influx of new construction and more move up buyers will continue to fuel growth in the region, although more moderate than in 2013.
As the number of foreclosures diminishes in Atlanta, investor activity is slowing down and new construction is ramping up. Last year, the city saw a nearly 40 percent YOY increase in new homes and that is expected to continue into 2014.
Interestingly, the lack of inventory is not driving up prices due to weak demand, but David Lightfoot with ERA Atlantic Realty reports that the sweet spot is between $75,000 and $250,000, reflecting healthy first-time homebuyer activity.
And we can definitely see the positive impact of new construction in places like Jonesboro, Arkansas, where a significant growth cycle over the past five years has resulted in a very strong new construction market where prices have increased 12 percent last year, in line with a 10 percent increase in cost per square foot in new homes.