As I have pointed out in the past, the Memphis Area Association of REALTORS® releases 2 sets of monthly sales figures. By the 15th of the following month the MLS sales figures are released, then about a month later the final sales stats, as reported by the filing of deeds, are released.
Based on MLS numbers, the April number of units sold dropped to 1063 from 1101 in April, 2009, a 3.5% decline. Median price of homes sold, however, rose by 14.3% (18.6% YTD)
MAAR April 2010 MLS Sales
So, why the stunning increase in median price? I looked at low price sales for this last year and this year, and sales across the MLS. In 2009, there were 3145 sales of properties less than $50,000. As of this writing, there are only 1046 active listings at or below $50,000. That is a 4 month supply (which normally indicates a fairly strong Seller’s market).
By contrast, in 2009, 1062 properties sold for over $300,000. Current active listings in that price range: 1699, which translates to 19 month supply (very strong Buyer’s market).
So, bottom line, we are running low on cheap houses, the kind investors like to snap for cash. Have you tried to get a mortgage on a house valued at less than $50,000 for owner occupancy lately? The investors that underwrite conventional and FHA mortgages don’t seem to want to touch them. Yet the less expensive property inventory is dwindling as the upper end inventory is growing.
The rise is median sales is not an indicator of an improving market or increasing sales prices as the real estate economists would have you think, but a simple lack on inventory of less expensive properties.
I don’t think we are out of the woods yet, and I predict that prices across the board will continue to drop, as those folks in a position to buy are looking for better and better values. As I conclude all my market report posts, let me remind you, once again, that all markets are hyper-local. A new listing may sell in a couple of days, while a similar property a few blocks away may go for months without a showing. Buyers, study your target market for the best values. Sellers, be prepared to adjust your asking price.
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