Home sales posted a significant increase last month, but pricing did the opposite due to the market’s surplus of foreclosures.
Shelby County saw 1,025 home sales last month, an impressive 18 percent increase from 871 homes sold during November 2010, according to real estate information company Chandler Reports, www.chandlerreports.com.
November was the fifth consecutive month with year-over-year improvement. Total sales volume reached $120 million as compared to $113.5 million during the same month in 2010.
Despite the large upswing in total sales, average home sales prices declined 10 percent from the prior year, averaging $117,243 compared to $130,352 in November 2010.
November’s higher volume of sales year over year coupled with a lower-than-usual price is indicative of just how inundated the market is with distressed housing inventory, said Sheldon Rosengarten, broker with Marx-Bensdorf Realtors.
“The volume is higher, but the price is lower,” Rosengarten said. “And that’s most certainly attributable to the short sales and foreclosure sales, which ultimately affects the values of John and Mary Smith who are trying to sell their home and who are not in a foreclosure sale format.”
Rosengarten said it’s a great time to buy a home, and that means sellers must be conscious about pricing when selling. A veteran of the residential real estate business for nearly four decades, Rosengarten is involved with more short sales now than ever before.
“As far as when (foreclosures will bottom out), I wouldn’t even attempt to guess,” he said. “I’ve been doing this for 35 years and you learn to adjust and adapt to the market you’re in. A lot of my time is spent counseling sellers because of their circumstances in the market.”
Perhaps that’s why bank (or foreclosure) sales were up 29 percent with 278 recorded in November averaging $71,860 and totaling $20 million. Overall, Shelby County bank sales are down 18 percent year to date.
Meanwhile, nonbank (or traditional) sales totaled 747 in November, a 14 percent increase from 655 in November 2010. Sales in that category averaged $134,132 and totaled $100 million.
The highest sales revenue across all sales in Shelby County’s 34 ZIP codes – bank and nonbank – went to Collierville’s 38017 with $16 million. Raleigh’s 38128 saw the most activity – with 75 sales averaging $49,442 and totaling $3.7 million – but 23 of those sales were foreclosures.
Linda Sowell of Sowell and Co. Realtors said November’s high foreclosure totals being up – not just in Raleigh but across the county – speak to the importance of having an agent for all housing transitions.
“(Our) seasoned agents (have) been through down markets before – never one quite like the one we just went through – but they’ve adjusted their expectations too,” Sowell said. “I think it’s like anything else, if this was easy, the public would need us, and in a market like this, agents really do bring value. There’s a lot of minefields out there to walk through and sellers do need agents in this market and buyers do too.”
And rather than get caught up in the numbers, Sowell sees the housing slump as yet another opportunity to fine-tune her business model.
“We watch our advertising dollars a lot more closely now than we did a few years ago and the Internet helps with that,” Sowell said. “But we have invested our advertising dollars in our website and in technology, advertising homes more than advertising ourselves.”
On the new home construction front, sales were up 20 percent from November 2010 with 72 recorded averaging $208,864 and totaling $15 million. Year to date, however, new home sales totals are down 25 percent from last year.
Conversely, existing home sales were up 18 percent in November, with 953 averaging $110,370 and totaling $105 million.
Chandler Reports is a division of The Daily News Publishing Co. Inc.