August Real Estate Sales Update
Slowdown in Sales Growth - As Predicted
For the second consecutive month US home sales slowed in August, despite record low mortgage rates. According to the most recent report from the National Association of Realtors (NAR), single-family homes, townhomes, condominiums and co-ops, declined 0.9% to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July. After last month's decline, sales are at their second-lowest pace of 2016, but are still slightly higher (0.8%) than a year ago.
The number of unsold homes on the market fell 3.3% to 2.04 million in August from July. Inventories were down 10.1% compared to a year ago. At August's sales pace, it would take 4.6 months to clear the stock of houses on the market. A six-month supply is viewed as a healthy balance between supply and demand. One year ago it was 5.1 months.
With inventory tight, the median house price rose 5.1% from a year ago to $240,200 last month.
August existing-home sales in the Northeast US increased 6.1% to an annual rate of 700,000, which is unchanged from a year ago. The median price in the Northeast was $274,100, which is 0.8% above August 2015.
The results in Maine, however, are a bit different. While YTD sales are up 12.3%, outpacing many other Northeastern states, the rate of increase has slowed somewhat in the last several months. August results were still a healthy 9.7% of prior year, especially considering that July 2016 results were actually 2.7% behind July 2015. Maine pricing is also up significantly. The YTD median price stands at $189,498 and is 5.3% ahead of 2015. The median August price of $197,000 is the second highest level ever recorded.
Unit sales in Cumberland County are lower than statewide results as YTD results are only 4.0% ahead of last year’s record setting year. The median price of $247,000 is 7.3% ahead of 2015. August’s price of $279,900 is the second highest ever recorded and represents the 14th consecutive month where current pricing exceeds that of the year before. That is significant and is a reflection of overall lower inventory levels.
It is worth noting that some communities experienced record-setting price levels in August. Portland’s median price of $299,200 was the first time in history the $300,000 barrier was almost achieved. Falmouth and Yarmouth both exceeded $500,000 (setting records) and many other towns exceeded $400,000.
In Cumberland County, the number of homes sold above $500,000 has increased a dramatic 15.5% in 2016.
Inventory & Pending Properties
Nationally, inventory levels are down about 10% from 2015. In Maine, over the last several months, this measurement has been approximately 12% to 14%. In Cumberland County the inventory shortage has been more acute; in some months exceeding 15% lower than the previous year. At the end of August, it was 14.5%. Some communities in and around Portland, however, are less than 10% lower.
The percentage of pending properties increased slightly statewide and remained flat in Cumberland County for the month of August compared to July of this year - and well ahead of prior year.
The graph below includes YTD sales results for many communities in greater Portland and southern Maine.