Chelsea snapshot 8/22/18

 

Market snapshot as of 8/22/18

DowntownChelseaMI

(photo from Wikipedia)

There are many ways to look at what the market is doing, but one of the most relevant ways is comparing period-to-period and what the market activity is as of the date observed. We can compare year-to-year, month-to-month, week-to-week, quarter-to-quarter, or other ways such as over a longer period of time, macro market, submarket, sales that resold over a given period of time, etc.

 

The snapshot below is a quick run of the Chelsea school district, without any filters other than trying to eliminate duplicate listings. If you observe one years’ worth of data, we had 209 sales compared to 53 that are currently showing as available, not under contract. This equates to 3.04 months’ worth of inventory based on the prior years sales. There are an additional 34 houses showing as under contract, meaning that out of a total of 87 houses not closed, 39.08% are under contract. That is quite robust in terms of number of properties showing as under  contract.

chelsea

I prefer median price observations as opposed to the average, but have included both for reference. Median prices normalize some of the wide swings of highs and lows and tends to be more consistent. If you look at this information, what you will see is that median sales prices have increased each quarter, but only on sales price, not sales price per square foot. Sales price per square foot has been more variable, as sizes have increased over the past quarter. Overall this shows an increasing market for this larger macro segment. What is very interesting is looking at the median list price of the properties under contract compared to the median list prices of the previous two quarters. This can be used as a predictor as to whether the market is continuing to increase, or if there may be a correction that is occurring, as is typical after the Fourth of July. The current median asking price on a median 2,033 sqft house is $299,900, but the previous quarter showed a median asking price of $322,000 for a 2,046 sqft house. That does show a correction in my opinion, closer towards the previous quarter. Again, this would not be unexpected because the market is most active in the summer, and the past two quarters would encompass those properties that went under contract and closed in the active months.  If you compare the prior year to the present data, the median list price was $10,000 lower than current, but the median size house was also smaller, meaning some of the change may relate to size.

 

Why do we care about current contracts and inventory levels? We care because these do help bring us to the present, instead of focusing only on the past. Although we could extrapolate a list price to sales price ratio for those houses under contract, it would only be an educated guess. They may well close over list price, as shown in the past two quarters, or they may close lower than list price, as shown by the first quarter, which may more closely mirror the current market.

 

Staying in touch with what is going on in the present, does not predict far into the future, but could help us understand a short-projected period. We have to know the past, but we also have to pay attention to supply and demand, number of properties going to contract, and their respective prices.

 

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