The third quarter has some interesting story lines that make sense once you consider what had occurred in the second and that is an uncanny May of big sales and the arrival of inventory. The two notable story lines that appeared in third quarter are condos are a sellers’ market where single-family homes are a buyer. Land has tapered off after a bigger second quarter while farm and ranch increase in inventory yet demand is quite minimal.
In Condos the average price went up and I think this is a bigger reflection of the quality of the units. Call em flips or folks ready to move on who’ve put in a lot of work to their property. Obviously, the sold volume is higher when the average price goes up despite less selling and it’s the improved quality of the available units that has enabled this to happen. Given that they are selling at 95% of ask tells me that the listing value is still up in the air compared to what buyers are willing to pay. Otherwise, inventory has risen in this quarter over a year ago, a similar amount is under contract, yet not as many has sold. Still, what I gather from this is that the market is still moving at the same demand rate as a year ago, we just have more on the market.
In the world of Single-Family Homes, we see signs of softening. The average sales price was up roughly 30k over a year ago yet only ten more homes sold in the third quarter. How is softening? Well, that’s not a big leap, so at the very least it’s a flattening. However, property is selling at 94% of ask and down 2% from a year ago which means there is less grounding in the list price. Perhaps sellers are pricing themselves higher than the market’s willing to pay while buyers are arguing is hasn’t gone anywhere and winning their side of the perspective. From an inventory stand point, we also look flattish in the third quarter yet it is generally up because most of it came on in the second quarter to start the summer.
In Land the third quarter doesn’t appear to tell a new story
if you’re unfamiliar with its history. In the second quarter it had a 41% rise in new listings with
80% more under contract and 68% more selling over 2023. Thus, in the third
quarter this starts to taper off as there becomes 47% less new listings, 36% less
under contract, and 16% less sold. Yet the average price is up so the total
volume comes with it. Either way, as a whole it’s been a much stronger year for
land with clearly more attractive parcels entering the market.
In Farm and Ranch, a couple of big ranches sold in the quarter giving the market numbers some fluff to work with. The good news is there’s a 35% increase in inventory and they look appealing. That said, this side of the market is much smaller than residential and their indication of movement is reflective of one another. Thus, I don’t expect this side of the market to show any notable movement until residential starts moving a shaking harder.
To start October, we are already seeing a decline in inventory and that could indicate a slow down over the cold months. New inventory has been a driver of activity. Then again rates are settling and we are upon a national election, so this winter be a snake in the grass ready to attack?
