Preface:
I have elected to change up my second quarter review from how I’ve done them in the past for a few reasons: 1. To look at year over trends last quarter is kind of useless in my opinion given we went nearly six weeks without any notable movement. 2. How does this time a year ago even compare to now? The world and its real estate market are a completely different place. Possibly one of the most accelerated times in human history and leads me to suspiciously think it won’t be the last. 3. Thus, I’ve felt it most appropriate to compare the second quarter against the first given the rate at which things have been occurring.
Last update, in June, I planted the seed that we could see the market start to taper off. Seemed reasonable as it’s hard to believe that any of this could keep going in the trajectory that it has. National market trends are seeing home sales slowing down at dipping 2-4% each month for the past four months or so. However, there is some data that shines some relevance on us. The entry level price point of 100-250k nationally is down 2% from a year ago whereas 750k-1 million is up 178%. I believe it’s the latter stat that shines the light on our current market. Which continues to beg the question, when does that side of the market slow down too?
Second Quarter in Review:
From a pure statistical standpoint here’s the bare bones of what the second quarter looks like against the first. Please note I do not include Mid Valley (i.e. “South of Ketchum”) in my analysis. If interested, please do target those stats in the tables below as you’ll see there has also been quite a bit of notable action in that sector both in single family and vacant land.
In Condos, the total sales volume was 14 million dollars more in the second quarter. This largely comes from Elkhorn, Hailey, and Sun Valley. Warm Springs stayed flat and Ketchum took a 6-million-dollar dip. Valley wide the average sale price has dropped 292k yet Hailey jumped up 255k. So, the condo prices for the most part have come down yet don’t be fooled. Ketchum, Sun Valley, and Warm Springs are closing at 101-104% of asking, which is to say condos are being priced to get buyers to bite often emotionally. Lastly with all the movement that has occurred those numbers are pretty affirmed by comparable sales.
Second Quarter Condo Stats:
Year to Date/First and Second Quarter Stats:
In Single Family Homes, you might find some surprises and then again maybe not. As a whole the total sales volume sold in the second quarter was only ten million more than the first, yet the average sale price is down roughly 500k. Hailey has the most amount of growth selling 12.7 million more in the second quarter. In terms of average sales price, Bellevue went up 260k and Elkhorn 1.23m. Notably, Sun Valley is down 780k and Warm Springs went down 600k yet again homes in these two sectors similar to the condo market are selling at 104 and 108% of asking.
Second Quarter Single Family Stats:
Year to Date/First and Second Quarter Stats:
When talking about Vacant Land you have to consider there are a lot of development projects that are not closed yet, reserved, or unrecorded. In the north valley you have the land rush of the White Clouds expansion in Sun Valley and Warm Springs Ranch. White Clouds are all reserved and pending in the MLS while Warm Springs Ranch is all reserved off market. Both projects are set to close in the late fall. In Hailey, the Sunbeam project is all reserved through its own website and unlisted on the MLS leaving Bellevue with the most recorded land sales. Bellevue deserves all the credit in the world for its movement, however the other three mentioned do leave holes in the recorded statistics of land sales in the valley. At a glance you might think lot sales are slowing and that couldn’t be further from the truth. I myself even gravitated to that thought given it will be three or four years till most building companies will give you a call back. My favorite part in all of this is that no amount of money is going to move you up their list. They all, for the most part, have the work, security, and integrity keeping them busy enough.
Second Quarter Land Stats:
Year to Date/First and Second Quarter Land Stats:
In Conclusion:
How is it that prices can come down, volume go up, and closings can occur at over 100% of the sales price? Listing agents are psychologically baiting buyer ship with tangible list prices. “Hey, that seems like a reasonable price. Maybe now is our chance to get in the market.” And by then they’re emotionally investing themselves and paying well above their intending target number. Knowing this and knowing that the market is said to be roughly 68% higher in some sectors as they were a year ago gets me a little deflated for my buyer ship when folks spending 1.75 million more on a house that was previously bought in September of 2020. Because despite this being inarguably a sellers’ market the buyers set market value. If no one writes the check then the list price can’t be the market price and buyers are writing the checks. To think of the not too distance past isn’t helping our view of the future because it is coming much quicker than we’re leaving the past. We are still under valued compared to the other premier ski towns and that's what this new outside buyer ship is taking advantage of.
At the moment our total MLS sales as a whole are currently at 512.6 million dollars as of June 30, 2021 compared to 202.4m by June 30, 2020. It’s been preached for ages that we have no inventory, yet we are projected to have even greater sales than last year. Inventory has been replenishing itself but not at the low rate we were already used to. I used to tell buyers, I’ve never seen anything good come to anyone who waited to buy in this market. I spent the last couple of months questioning that remark and asking myself, is now finally a good time to wait? I think I am leaning back towards my original thought as I do not see anything stopping this stampede for at least three more years. So, what should buyers do till then? Buy, and buy what you can afford because pretty soon you could find yourself priced out of anything. And I don’t see how 2011 prices could ever be found again. But who hasn’t been wrong before?
