Things are looking up in the Milford market…

I took a look back at the last three years’ worth of sales data that I’ve collected for the Milford market for the month of August. Several things jump out. Distressed sales have fallen dramatically. The size and prices of houses that are selling have greatly increased. The SEV multiplier that people are getting for homes now has dramatically increased. And the sales price per square foot has increased quite a bit. We are now back over $100 per square foot, after languishing well below that value for the last few years.

2012 August

Percent Distressed Sales – 5%

 

  Listed   Price Sold   Price %   sold/

Sold

SEV   value  SEV factor DOM Sq.   Ft. $/SF   listed $/SF   Sold
Ave

$279,530

$274,977

98

$111,965

2.4540

69

2,387

$119

$125

Med

$244,900

$245,500

97

$104,525

2.4855

49

2,153

$108

$108

 

2011 August

Percent Distressed Sales – 38%

 

  Listed   Price Sold   Price %   sold/

list

SEV   value  SEV factor DOM Sq.   Ft. $/SF   listed $/SF   Sold
Ave

$241,819

$225,044

95

$113,460

2.1348

108

2,356

$103

$96

Med

$207,450

$190,000

94

$96,700

1.9008

88

2,253

$101

$94

 

2010 August

Percent Distressed Sales – 54%

 

  Listed   Price Sold   Price %

sold/

list

SEV   value  SEV factor DOM Sq.   Ft. $/SF   listed $/SF   Sold
Ave

$125,000

$116,000

98

$96,570

1.5993

36

1,344

$93

$85

Med

$153,659

$147,200

97

$98,829

1.4779

83

1,755

$88

$83

 

What all of this points out is a greatly improved market in Milford (Village and Township). If I run the numbers from the other eight markets that I track they show similar, if still somewhat uneven, improvements. What this is telling me is that we have indeed turned the corner locally in the real estate market. Bigger houses are selling again and for better prices. The low DOM numbers are also indicative that we are in a seller’s market with low inventory. Homes are selling relatively fast and at 98% of asking price, they are selling for what the sellers want to get.

In our hey days (some might say in our crazy, real estate bubble days) Milford normal properties in good condition were selling for between $124 to $144/Sq. Ft. Luxury homes were well over $200/Sq Ft. We have a ways to go before we get back to that level, if we ever do again.

Appreciation in this market is running about 6% so far this year, which is above the historic average of 4%, but which is indicative of the tightness of the market. Demand is outstripping supply right now. That has builders putting up new-builds as fast as they can in several areas.

So, is the market back, or is this just a temporary uptick? We’ll see how thins progress as we head into the slower real estate seasons of the late fall and early winter holiday seasons. My gut feel is that there is a pent up demand that is still not being met – there are people who want to sell who are still trapped in underwater homes and there are buyers frustrated by not seeing anything that they want to buy.

As values appreciate more and more would-be sellers will reach at least a breakeven point and get on the market so they can get on with life. Then buyers will have more to choose from. Things might also benefit from getting past the uncertainties caused by the upcoming presidential elections, no matter which way it goes. I think we’ve turned a corner and I don’t see us sliding back into a housing recession; however, things need to continue to improve before we will get back to a more normal, balanced market.

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