December is almost always the slowest month of the year as home showings gives way to mall shopping, Internet home searches gives way to Internet Christmas purchases, and even home sellers choose to decorate and prepare for the Holidays instead of prepare for buyers. Still, December tends to be a great forecaster of the year ahead so it's worth taking a look at some signs of what December numbers tell us about the year to come in Maple Grove Real Estate:
Supply (New Homes on the Market) - Even with a standard "Santa slow down", it's worth noting when new supply reaches the lowest number since the turn of the millennium. Market supply for December wasn't just down nearly 16% from 70 to 59 for December year over year, it was the lowest amount of homes hitting the Maple Grove market in December since the supreme court ruled that Bush beat Gore in the election, Montgomery Ward announced they were closing after 128 years, and N Sync was singing "Bye Bye Bye". December 2000 . < See December Listings > Basic economics tells us that if supply going down is an important piece of prices going up. The other piece of course is Demand.
Demand (Homes Sold in December)
It's easy and simple to look at the 77 homes sold in Maple Grove during December 2012 and be disappointed or even bored that it was down 3.75% from the previous years number. Digging deeper however, does show possible positivity in the market. The December closed to list ratio compares the amount of homes that came on to the market to the homes closing, or sold during December. A positive number, which tends to indicate increasing values the following year, shows more homes sold than listed, while the converse (more homes listed than sold) was true consistently during the drop in the market. The 2012 December CtL Ratio shows a return to 25%, something we haven't seen since 2004. < See CtL chart >
Of course, the past is no guarantee on the future of the market, however for the Maple Grove community, the December Closed to List Ratio has been a nice indicator of the strength of the market for the following year.
More Positive Signs for the future of the Maple Grove Market - Distressed sales of homes, or those that have either been foreclosed or have sellers who need to request a "short sale" from their lender, have been a thorn in keeping house values strong as those sellers tend to be much more interested in moving the "product" than retaining values. A look at the two types of distressed sales seems to be predict a dropping inventory, leaving traditional sellers with better comparable sales and strength within the market.
Sheriff Sales - is one of the final steps to a foreclosure and banks taking ownership of the home. It's a significant number as a predictor in how many "bank owned" homes will be coming on the market for sale in the following six months. For the second half of 2012, Maple Grove has seen an extensive drop in the amount of sheriff sales happening within the community. According to Hennepin County data, for the months of July - December, the total sheriff sales where down over 30% in 2012 as compared to the same time frame in 2011. This is a great indication that traditional sellers may experience less competition from distressed sellers when considering to list their home.
Short Sales Listings make up the other portion of distressed supply in the market. While there is no "redemption period" to wait through on a short sale, it is typical for a home sale to occur four to isx months or longer AFTER the home was listed during the time of bank mediation. Looking at listings then, it's worthwhile to compare the supply of short sales for the second have of the year (July - December). Using that time line for the second half of 2012 compared to 2011, we see a similar drop in the amount of short sale Listings, down more than 37%. While there where 99 short sales listed from June-December in 2011, that number dropped to 62 during the same time in 2012.
There's a lot of positive information going into 2013, but only time will truly tell if the numbers and data tell the truth. Best wishes to everyone for a wonderful 2013!
David J. Garves