S&P/Case-Shiller: Home prices hit 33-month high and the 30A Market

S&P

Real Estate markets have been cooking pretty much across the nation with inventory levels at record lows in many markets so you’re likely wondering………..what about the 30A market? With the news of S&P/Case-Shiller home prices at a 33 month high I thought it would be interesting to review the 30A market in comparison. Remember, real estate is local and the Case-Shiller is a composite of single family home price indices for nine U.S. Census divisions (large swaths in the U.S.) calculated using estimates of the aggregate value of single family housing stock for a certain time period; in this case taken monthly. March price index numbers hit a fifth consecutive all time high and the highest in 33 month with a reported gain of 5.8% annual gain and it seems new inventory is the key to this growth because inventory is low driving prices higher. With the possibility of the Fed raising rates soon sellers could be deterred to sell and move continuing the inventory shortage and either driving prices higher or at least maintaining the gains. Obviously prices cannot and will not rise forever, but there is no telling when rising prices and/or mortgage rates will force a slowdown.

So, with this, how are we looking on 30A as compared to the S&P!? As you might imagine, your realtor says REALLY REALLY GOOD and in line with the S&P report!! I know it’s sometimes difficult to believe everything a realtor proudly says about his market but I’m not asking you to blindly follow, only that you believe what you see in the numbers. Let’s start with 30A East. We all know 30A East is the “happenin” sector of 30A especially the corridor from Camp Creek/Watersound Beach to Rosemary Beach, and now Inlet Beach, booming with new construction and sales along with new commercial businesses aplenty. Truly 30A is a segmented market with it’s disparate planned communities and those outside of them. As you can see in the chart below, year-over-year and year-to-date both list and sale price continues upwards but for one, median sale price year-to-date which dropped 8.16%. This is a number we should keep an eye on of course. Inventory is down year-over-year slightly and up just a bit, 2.05% year-to-date but at 8 months would be considered a “buyers market” if this were your typical jobs driven market but it isn’t, so I think 8 months to be pretty healthy in a luxury second home market that 30A is. I can tell you personally inventory certainly seems a bit low when trying to find the right house for buyers and it’s truly hard to compare your typical every day market where 6 months inventory is healthy to a luxury second home market. So I’m going with 8 months being neither a buyer or seller’s market in this case; it’s balanced. Days on market has taken a major jump. This concerns me just a bit as this along with the median sale price drop year-to-date could in fact mean buyers are pushing back on escalating list prices.

Now to the West. The West side of 30A actually looks a little healthier across the board than the East end at first blush. Look at those (chart below) smooth list/sale price numbers just going up up and up both year-over-year and year-to-date while days on market are generally down. There is a slight rise in inventory but again it’s in the 8 month window I consider okay in our market. Could it be that buyers are heading West because it’s less expensive, less crowded, and less traffic even though the commercial options are relatively limited? Well, before boarding the wagons let’s take a cursory glance and some additional data.

The East end saw a drop of 12% in closed sales year-over-year but a rise of 17% for the year so far while the West fell both year-over-year and year-to-date, 53% and 17% respectively. Pending sales dipped 17% year-over-year yet are up 21% year-to-date in the East while the West showed even more promise with rising numbers on both accounts, 87% year-over-year and 5.9% year-to-date. The close sales numbers in the East crush the West as do pending sales on a year-to-date basis so that tells me buyers are still loving the East. Finally, let’s find out what’s happening on the active listings front to get an idea of what sellers are doing and how that might impact inventory, and prices.

East end active listings are up 9.3% year-over-year and 16.3% year-to-date and rose 6.1% year-over-year and 2% year-to-date in the West. I’d say the East end numbers are pretty significant and what might be propping up the inventory numbers but I’d also say buyers are looking for newer updated light and bright properties while some of the early to mid 2000 build homes sit on the market so it’s pretty tight for what buyers actually want. However, we need new listings to continue hitting the market so this is a good trend for now.

All in all I’d say the 30A market is mirroring other strong markets across the country and is one of the strongest reflecting the S&P report. Who knows how long this will last but do we ever? As for now things are looking good and I see no reason these good times should not continue.

30A East

30A West