A recent survey poll of current buyers by Harris Interactive finds 25% holding back from making their move until after the election. We see this partially reflected in pending sales off from recent months.
Looking at the glass as half-full, less timid buyers today and motivated sellers may find less competition in this pre-election season.
The other statistical trend of note is a gradual increase in inventory across most market segments.
One group of buyers who aren’t ‘timid’ is the institutional, big-money buyers, who continue to buy primarily distressed lower-end properties with a vengeance. In fact, the top ten spenders have acquired just under a quarter billion dollars in residential properties year-to-date.
In the mid-range arena, again, the word on the street is that with the market improving sellers are holding firm on prices. On average, mid-range prices are increasing. In Scottsdale, where the average price is about $500,000, closed sale prices are 9% higher year-over-year. While this is only about a third of the appreciation seen on the lower-end, it is both significant and welcome.
For a statistical view, based on average price per square foot of the mid-range market ($500K – $1M) over the past 2 years, see the chart below.
Again, distressed property sales have been the main driver for cash investors primarily under $300K. By contrast, in the mid and upper-ranges normal sales dominate.
In the luxury sector, year-over-year prices are beginning to stabilize, though luxury is a market with many submarkets. It really depends on where you look and at what specific price point.Generally speaking, prices are still at least 45% from the early 2006 peak.
It will be interesting to see if there is in fact a post-election surge in buyer activity, however mitigated by the traditional slow-down during the holiday season…meanwhile, if you’re not one of the timid ones, now may be a great opportunity to make your move.
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