Coldwell Banker Gosslee

Coldwell Banker Gosslee's November Housing Market Update Main Photo

Coldwell Banker Gosslee's November Housing Market Update


Keeping you in the know
Posted: December 24, 2020 by Jessica Wimberly

2021; HERE WE COME…ALMOST WITH A $600,000 SURPRISE

I imagine you are like me and thrilled that we are almost through 2020!

Somehow I stumbled on an ESPN.com article (I love sports but don’t normally go there) and read this great article about how March 11, 2020 was the day that changed America. It made me think how far we’ve come this year as a society adjusting to a new normal.

And while we can’t get to 2021 fast enough, when I write these posts about real estate I’m always a month behind. That’s because the National Association of Realtors and our own Coldwell Banker Residential Sales Report need the prior month’s activity to show what is happening.

Oh well, I guess I’ll have one more to write about 2020!

This year’s real estate business had three distinct phases. We started well with a solid amount of activity. There was then a drastic decline in sales in the early portion of pandemic. A rebound followed that exceeded expectations as low mortgage interest rates brought more buyers into the market as the year progressed. We are seeing this activity showcase itself in the numbers.

Nationally, according to NAR’s Existing Home Sales Report, November sales were 25.8% high than last November. This pace equates to 6.69 million homes sales for 2020, a dramatic annual increase. But compared to October, sales slowed (likely because of the Thanksgiving break) by 2.5% ending a streak of five straight months of increases.

The median home price across the U.S. is a whopping $310,800, a rise of 14.8% over last November. This marked the 105th straight month of year-over-year increases. Remember, the median price is the one in the middle of all November homes sold.

But the big story in real estate continues to be the decline in the number of homes for sale which has created a supply vs. demand imbalance. The U.S. has just 1.28 million homes for sale, a 22% decline over last year, which is an all-time low 2.3-month supply. Last November there was a 3.7 month supply.

Incredibly, 73% of all U.S. homes sold in 30 days or less with the median time on market at just 21 days compared to 38 a year ago.

Now let’s dive into what we really care about – Northwest Louisiana – where we are mimicking the U.S. in almost every way.

Normally, our region of the country is what Coldwell Banker Gosslee President Brad Gosslee calls “Steady Eddie” where we avoid large dips and increases. But we are seeing some greater shifts than in previous cycles.

We experienced a record in November of 493 homes sold in Caddo, Bossier and Desoto Parishes, up 48% over last November. This was our fifth straight month of record activity and set us up for what will likely be a positive total for all of 2020 as we are currently up 12% in total sales – 5,011 vs. last year’s 4,489 last November.

And while sales are up almost 50%, our supply of homes is down almost the same amount. We entered December with only 1,090 homes on the market in Northwest Louisiana, off 44% from this time last year. Interestingly, our median time on market was the same 21 days as it was nationally compared to 49 days last year. We have just a 2.4 month supply overall and even tighter supply at the lower end of the market.

I recently talked to Brad about this and he reported it’s the lowest supply he has seen in 13 years of tracking the data!

Now I bring you a math problem:

Record high sales Record low inventory =  ?

Yup! Higher prices.

Our median home price in November was $190,000, up 6% over last November. Even though it is up, thankfully we remain so much more affordable than other places around the U.S. Can you believe our price is $120,000 lower than the national number?

This chart breaks out what NAR reported vs. what is happening locally. Record levels are marked in red:

 

U.S.

(change over November ‘19)

Northwest LA

(change over November  ‘19)

Median Price

$310,800/ 14.8%

$190,000/ 6%

Number of Sales

6.69 million/ 25.8%

493/ 48%

Inventory

1.28 million/-22.0%

1,090/-44%

Months’ Supply

2.3/3.7

2.4/4.9

Days on Market

21/38

21/49

 

There is another number that continues to rise and I’m really happy to see it – the average sales price to list ratio. This is a barometer of how well agents and their sellers are pricing their homes. If they price a home too high and it sells for much less, the ratio will be lowered. A perfect buyer/seller ratio would be 100%. The closer to that number, the better.

Congrats to the agents! November saw the percentage jump to 97.7%. Even with market fluctuations, agents are doing a great job with their sellers on property pricing homes. This number allows prospective buyers to get a solid handle on what a home will likely sell for. As an example, you could imagine that a home priced at $300,000 would sell for $293,100

I’m asked a lot by people how you know if an agent is really good at selling a home. After learning about how their past clients valued them and the rapport you have with them, I suggest a couple of things to look for:

1)    What price points do they have experience with?

2)    What is their list to sales ratio for homes they’ve sold in your price range?

3)    How successful are they in closing deals at this price point?

What you will usually find is the agents with experience in your price range are best equipped to help you set a good price for a quick sale at the best price. Usually an agent will work to price the home to create demand early in the selling process. “Stale listings,” those that stay on the market for a long time, are usually not well-received as buyers instinctively think there might be something wrong with the home. Remember, today’s market is unique and we are seeing multiple bids in certain neighborhoods that are driving prices sometimes beyond the asking price.

This model is not the norm at every level of the housing market. For example, with more expensive homes the number of potential buyers who can afford it obviously shrinks making the normal time from listing to sale usually take longer. Fewer sales also means it is sometimes harder to set the right price and therefore the ratio might be a little further from the magical 100%.

Take a look at this chart which shows how much greater demand for lower priced homes in our market is:

Price Price Range

Number of Available Homes

Month Supply

Total

1,090 (record low)

2.4

Under $100,000

242

2.8

$100,000-$200,000

369

2.2

$200,000-$300,000

192

1.6

$300,000-$400,000

107

2.6

$400,000-$500,000

74

4.6

$500,000

106

8.9

 

While I don’t normally do this in these posts, I do want to deliver a commercial message:

Our agents are incredible! For those interested in selling you home, I encourage you to talk with one of them. Normally, you might be inclined to wait until the spring to put your home on the market, this year might be different. Our agents are full-time and have the experience to help you navigate the market. Remember, not only will you need sage counsel as you sell, but you will also need it when you buy.

This is even more important at the higher end where inventory is greatest and the potential pool of buyers is less requiring targeted and effective marketing.

To help, for the first time we’ve broken up activity at the $600,000 level and it is fascinating to see that in all three of our parishes, there have been a combined 61 sales at this level, 41 of them in Caddo Parish.

This chart shows what is happening at every price point in each of our parishes:

   Price Range

Year-to-Date Number of Home Sales in Caddo Parish (% change over 2019

Year-to-Date Number of Home Sales in Bossier Parish (% change over 2019

Year-to-Date Number of Home Sales in Desoto Parish (% change over 2019

Year-to-Date Number of Home Sales combined (% change over 2019

Total

2737 ( 9%)

2055 ( 15%)

219 ( 18%)

5011 ( 12%)

$100,000 & less

689 ( 5%)

248 (- 11%)

42 (-16%)

979 ( 5%)

$100,000-$200,000

1128 ( 5%)

671 (2%)

55 ( 2%)

1854 ( 4%)

$200,000-$300,000

573 ( 16%)

754 ( 23%)

66 ( 32%)

1393 ( 20%)

$300,000-$400,000

184 ( 14%)

258 ( 27%)

44 ( 83%)

476 ( 25%)

$400,000-$500,000

81 ( 23%)

83 ( 57%)

11 ( 57%)

175 ( 39%)

$500,000-
$600,000

41 ( 24%)

31 ( 24%)

1 (0%)

73 ( 24%)

$600,000

41( 41%)

20 (-5%)

0

61( 22%)

 

The chart helps us see that the bulk of activity at the lower end of the market - $200,000 and below – happens in Caddo Parish, while the mid-tier $200,000-$400,000 market is more robust in Bossier Parish. While the two are about equal in the $400,000-$500,000 range, it is apparent that the bulk of luxury sales occurs in Caddo.

It is also interesting to see Desoto as the overall percentage leader. While their sales numbers are relatively low, the percentage increases – especially with 36 more homes sold between $200,000-$400,000 – is apparent.

It can’t wait to see how we close the year and if the trends I’ve shared remain the same. If you enjoyed this, you will love our more in-depth Coldwell Banker Gosslee Residential Real Estate Sales Report.

Remember, if you are considering a move, please reach out to one of our 150 agents. They are available to talk, provide insight and help you make the right decisions. And, as always, you can reach out to me at jessica@cbgosslee.com.

Happy New Year!

 

 

 

 

 

 

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