True, I am late writing the Market Watch Newsletter for our local Bullhead City, Fort Mohave and Mohave Valley real estate market. Don’t think for a minute I wasn’t on schedule Monday morning running the numbers and filling in my chart when a yield sign glared at me. The median sales price dropped from January and the percentage of homes (79%) selling under $150,000 increased to an all time high, while the number of homes for sale dropped 61% from last year at this time. What was going on? I needed a few days to reflect.
I continue to expect that as the inventory of homes for sale continues to drop and the sales continue to remain steady, prices should begin to come up. Well considering the Niagara Falls price drop we have been experiencing for years, I remain positive that these slight dips are merely bubbles in the brook. The two most perplexing changes are the large number of homes selling under the $150,000 price point and the fewer than 300 homes for sale. During the month of February homes selling under $150,000 made up 79% of the market with 50% of those homes being foreclosures and 7% being short sales. This is good news for the upper end of our market as most of these sales are what we now refer to as “normal” or “non distressed” sales. I wonder, if we had more of these homes on the market that were price well or had added value that the buyers were willing to pay for, would we have more sales in this price range? Has our inventory shrunk so far that we don’t have the right home for buyers in our area?
Currently there are 284 homes for sale in Bullhead City, Fort Mohave and Mohave Valley. Just looking at the month of February over the years the number of homes for sale is down to 284 from 451 last year; down from 456 of 2010; down from 777 of 2009; and down from 969 of 2008. Let’s look at February again and as mentioned the number of sales continue to either increase or remain consistent with 76 sales this month; 65 sales in 2011; 89 sales in 2010 (give some credit to the first time tax credit); 63 sales in 2009; and a measly 36 sales in 2008. I’m getting off tract but in 2008 we had 16.4 months of inventory contrast that number to the 4.8 months of inventory today.
I remember when the real estate bubble started in Bullhead City. The $100,000-$125,000 price range was always experienced the most sales. Suddenly there were no sales at this price point. Was there not a market for this price point? No, the homes in this price range did not exist and the new price point that saw the most sales was $125,000-$150,000 and on up the market went.
While statics are easily found on line and our median sales price rolls in at $95,000, I guarantee you that we will be hard pressed to show you homes in this price range today. If you choose to shop in this range (Click here, to see homes from in the $90,000-$105,000 price range) you will be greatly disappointed as there are only 7 to choose from and you may run up against multiple offers and homes in disrepair. Don’t let the over rated median sales price fool you. The reality is that most of the homes creating this number are foreclosure homes in need of repairs. They require plenty of work and would be ripe for any Home Disaster DIY television show. Investors and cash buyers are quick to relay what a low price per sq foot they pay for homes. On the flip side, I have never had one relate how much they have earmarked to repair their homes.
Of the 284 homes currently on the market for sale, there is only one home built as recent as 2011, two built 2010, two built 2009 and a whopping six built in 2008. There are a handful of homes that can be built on a lot, but are not started. With home sale number remaining strong, inventory at an all time low I think it may be time to consider the new home or at least a non distressed home. Perhaps not the mega home of the pre bubble years but an affordable reliable home that can be purchased with a warranty instead of a bank “as is” addendum. Perhaps spending a bit more at the closing table instead of coming out of pocked thousands or tens of thousands during your first 90 days of home ownership may make more sense. And by the way, a few more dollars at the closing table at 4% interest for 30 years may be a better deal than hard cold cash spent on repairs.
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