The home sales market improved in 2012 and is likely to remain strong this year compared with the poor stretch from 2008 to 2011, Henderson County real estate sales agents say.
Homeowners selling a house worth up to $300,000 are in the best shape while those selling higher end homes priced over $500,000 have the longest wait. A reduction in foreclosures and other short sales and a marked improvement in feeder markets that send buyers here make for a brighter 2013, the agents said.
"The market is still at $150,000 and less homes and we've seen an increase in $150,000 to $250,000 since last year," said Jim Durfee of Preferred Realty. One number Realtors use to measure the health of the market is months of inventory —how long it would take to sell off all the houses on the market. Two years is bad; the tipping point from a buyer's market to a seller's market is six months.
"In the year 2010, the months of inventory was 23.8, in 2011, it was 19.2 months, but at the end of December 2012, it dropped down to 12, so we did see definitely an increase in 2012," Durfee added. "We think it's going to remain about the same, maybe a little bit better" in 2013.
"There's pent-up demand, I think that's part of what it is," he said. "Rates are low, jobs are more secure. We're coming out of the recession a little bit."
If the market does heat up, the supply of homes is likely to inch up, too.
"If the market gets good, a lot of people will put their homes on the market," he said. "Because there's a lot of people that would want to sell, I know they do, they're just not going to put their home on the market because they don't want to give it away. ...
"The short sales and foreclosures have kind of dropped back now. Although the banks still have an inventory they have to sell, they've held back on them for legal reasons. The inventory's going down so we're going to see a slight increase in price but I don't want to hammer that too much or people will say, oh, the market's going up."
Lower the price, quicker the sale
Among the key figures:
• 84 percent of sales were of homes that sold for under $300,000.
• 2012 saw the first drop in average days on market since 2006.
• "Normalized values and historically low interest rates (are) creating the best affordability levels ever," Beverly-Hanks & Associates said in its year-end report.
• While the inventory of homes from $100,000 to $200,000 has dropped to eight months (from 13 months in 2011), the inventory of homes listed from $800,000 to $900,000 increased to 96 months (up from 54 months in 2011) and the inventory of $1 million homes and up remained very high at 140 months.
• The median sales price inched up to $168,250, from $168,000 in 2011.
• The average price paid rose to $200,907, up from $197,420 in 2011 but well under the peak of $260,324 in 2007.
• Sale of distressed properties remained unchanged at 18 percent of all sales, slightly below the national average of 22 percent.
"At this point we are ahead of what we were in 2008," said Steve Dozier, a Realtor with Beverly-Hanks. "Beverly Hanks had one of its best quarters" at the end of 2012.
Dozier, too, said falling inventory is a good sign.
"Four years ago we were running 24-25 months of supply. That supply is 10 months. Below six months is a seller's market. A lot of the feeder states are very much back in a seller's market. We're actually seeing a number of bids on homes now."
Most of the good news on the home sales front is in the lower to mid-value price range.
As the share of short sales and foreclosures drops, the market will improve, too.
"We're slowly grinding away at that market," he said. "By summer we'll be at a seven- and 8-month inventory and at that point you'll start to see new construction. So we're expecting a good year in '13 unless the government does something to screw it up, which they can do in a heartbeat."
Rich Cooke, a Keller Williams Realtor, said sales are definitely increasing, although prices remain stable.
"There's no indication yet that we are starting to see prices climb," he said. "I do feel we've reached the bottom pricewise. I think it will continue to be a buyer's market for another year. We lagged the rest of the country going into the recession and I think we're going to lag the rest of the country coming out."
One thing the great recession has done is flush a surplus of real estate agents from the market.
"We have a little more than half the Realtors we had at the height of the market," Cooke said.
Ron Stephens said the phone is starting to ring more.
"I think it's going to be positive," said Stephens, also a Beverly-Hanks Realtor. "We had the best year last year we've had in three or four years. Based on the response we're getting, the emails and phone calls, we think it going to be very positive. Supplies are getting sort of low. A lot of people have just held off, and while it's still a buyer's market we also see prices beginning to ease up so that's bringing on more listers. As demand goes up, it's economics 101 that the prices are going up."
Like Dozier, Stephens said he fears that the government or the banks could raise mortgage rates, which would suppress sales. He has contacts from his days in real estate in Florida, he said, "and they just about all are telling me that things are better down there."
Overall, Durfee predicted, the 2013 market will see "a steady increase like we had last year. But it's still a very competitive market. There's only so many buyers and there's a lot of people that want to sell."