It’s time to take a look back at the first half of 2017. Can you believe it’s already the end of July?!
Let’s start with the basics. Yuma’s average sales price is $147,937. When you exclude manufactured homes, the average single family residence (SFR) sold for $171,887. With 1,482 homes sold, we are averaging 247 sales per month.
Compared with last year at this time, inventory is down, prices are up and sales are up.
First off, let’s talk about mortgage rates. Rates are lower than anyone expected them to be by this time of the year. If you look at the forecasts from MBA or NAR, everyone was counting on rates being in the mid to high 4’s by this time.
But according to the Freddie Mac PMMS, the current 30 year fixed average rate is 3.96%. Still under 4.0%!
To put that into perspective, here’s a chart of rates back to 1971. Only in the last few years have we EVER seen rates this low.
As a whole, home prices in Yuma have been rising for the last several years. We saw the market bottom in 2012 with an average sales price of less than $120,000. By 2016, that had risen to just under $150,000.
However, keep an eye on the appreciation rates. From 2015 to 2016, homes appreciated at just 1.8%. So far this year, the average sales price is $147,937. Now, prices tend to be slightly lower in the first half, so we might still end the year with slightly increasing prices. However, the way things are looking, we are in for either a very slight increase or a very slight decrease in the average sales price.
That being said, June marked the highest average sales price month since October 2008.
Rates and home prices, along with employment and incomes, go together to determine how affordable it is to live in a given market. Yuma’s number is currently 174.96, which basically means a family earning the median household income here can very easily qualify for our average home. A reading of 100 means the median income is exactly enough to qualify for the average house.
Compare Yuma’s 175 with the national average of 153. Bottom Line: Yuma is an affordable place to own a home.
Our new home construction market fell off a cliff in 2007, and has been slow to recover. However, there are a few positive signs recently. As you can see on the chart, the bottom of the market was 2012 with only 241 new homes being built the whole year. Since then we have 4 years of slow recovery.
Notice there were 59 new housing starts in May 2017. You have to go all the way back to April 2010 to find a stronger month.
One thing it is always interesting to keep an eye on in the real estate market is inventory levels. We call it “months of supply.” In other words, if homes keep selling at the current pace, how long would it take to run out of available houses for sale if no new ones came on the market? Overall, we are at about 5.2 months of supply, but if you break it down into price category, it’s a little more interesting.
Another way of looking at this data is to compare sales with listings. On the chart below, the green bars represent homes sold in the first half of 2017. The blue bars represent homes actively for sale as of July 10th.
13% of the first half sales have been in the <$100,000 price range, and 8% of the current listings are in this range. This disparity, (more sold than for sale), makes for a “seller’s market.” If you have a house to sell for under $100k, there are lots of buyers looking, and not many competing properties. You may have an easy time getting it sold. If you are a buyer, you may face lots of competition for that house.
You will notice that the sellers market prevails in all the $175,000 and under price ranges, as well as the $200-$225,000 range. In the upper ranges, it flips to a buyer’s market.
One other market consideration is the impact of foreclosures. For Yuma county, foreclosures peaked in 2010 with 1,019 homes being foreclosed. By 2016, the number had dropped to 321, and there have been 121 so far this year. That puts us on pace for 242 in 2017. Another decline, but it would sure be nice to see it drop even further.
Overall, financing is readily available and relatively easy to obtain. Large sections of Yuma county are still eligible for $0 down USDA financing, including Somerton, San Luis and Wellton.
Yuma is facing an appraiser shortage, which translates into longer than normal approval periods. The average time from contract to close is 56 days.
I hope this information helps you with your buying or selling decision. If there is anything my team can help you with, please let us know. We would love to be your mortgage lender.