Defining what the bottom of a market is may be different depending upon who you talk to. Looking at numerous sales indicators and their trends can give you a good idea of what is happening in the market. Unfortunately you won’t know for sure where the bottom is until many months later when trends show solid positive signs for a few months in a row. Right now there are numerous trends that have begun to show positive signs. If these trends continue it is likely we are at the bottom right now. Below is information on the positive indicator trends we have begun to see.
Inventory is at its lowest point in many years. As of this writing the total number of listings in the Outer Banks Association of Realtors MLS system was less than 2900. During the winter of 2007 the local MLS system had around 1000 more properties for sale. Decreased numbers of properties for sale is good for sellers because when properties become scarce prices go up. As this trend of fewer listings continues, chances of appreciation will continue to go up.
Demand continues to be up over 2008 and 2009 and steady compared to 2010. The total number of sales for 2011 was slightly less than 2010 but Hurricane Irene had a big impact on buyers this past fall. Sales to remaining close to 2010 (which was the best year for total sales since the boom years), is certainly a positive sign for this market.
The average sold price per square foot for detached single family homes in our local MLS has leveled off. This number shows what buyers are paying on average for each heated square foot of living area in our local MLS. We saw a pretty significant downward trend in this number between the boom times and the middle of 2010. Since then this number has stayed relatively stable and slightly improved compared to the lowest points a few months ago.
The number of sold foreclosure properties sold has gone down in our local MLS over the last few months. Distressed properties have a big impact on market values. They should have less of an impact on the market as their percentage of the entire sold inventory goes down.
So have we seen the bottom yet? One can make a pretty good argument that we are at or near the bottom right now. However, it is likely we won’t know for sure until we have turned the corner. Here's the latest on the Outer Banks real estate market. If you have not looked at Outer Banks real estate recently, it is a good time to take another look.