This is a quick update to the our March Newsletter. At the time I published our newsletter we didn't have the February numbers in at that time. The trend continues to be positive as we note 107 closings for all price points in the 23 town service area we track. That represents a 21.59% increase over Feb. 2009. The luxury market lost a bit of ground and reported only 1 closing for February compared to just 2 last year.

 

Sales volume actually reported a 28.59% which is encouraging. As you'll recall from past reports, sales volume had been lagging closings which indicates a market that is beginning to stabilize. Because this is from all price points this is heavily waited to the $400K and under price bracket. 

 

The number of new listings that came on in Feb. 2010 was 414 across the board, slightly higher than the 364 reported in 2009. 32 of these new listing were luxury listings adding to the already heavy, 64 months of inventory we have based on the current sales pace. 

 

What's happening to listings above $1M?

 

Most luxury listing clients are quite anxious. Everyone wants to sell and they're asking "where are the buyers?"  The answer is complex. Some of these luxury homes on the market are 2nd and 3rd homes and many with water features: direct waterfront, views, docks, beach, etc. My research and reading blogs have turned up a consensus that the 2nd home markets are going to face some downward price pressures as many can no longer afford or justify maintaining a second home. Some luxury sellers are keeping those vacation homes they use most and selling the ones that aren't making sense. That puts the supply and demand curve more in the favor of buyers. 

 

For the primary residence market the sales are occurring on homes that are under market value unless the home is simply that unique or its location a no brainer. It's very much a beauty contest and a price war for both primary and second home sellers.

 

So, if you're a luxury seller and your home is a gorgeous specimen with little in the way of showings and offers in spite of great marketing, you must simply get your arms around the idea of pricing your home to shine brighter in a sky crowded with other stars. Pricing your home 10-15% below market will win that one buyer that is now statistically far and few between. 

 

Take a look at the spreadsheet where we track the closing activity going back to 2007. It's a scary decline in the number of closings: 

 

Thanks for reading. I will report in next month and update you on the Q1 for 2010. 

 

Spring is just 3 days away…and it's beginning to feel like it!