For each of the months March through June, the semi-detached home was the only property class challenged by an undersupply of inventory as buyers looked to find an alternative to the high priced detached home. In the process the median price was boosted since January by $48,000 to $495,000 besting the $37,000 change to the median price for detached homes and more than doubling the $20,974 increase for condominium apartments.
Where the month-end supply for detached homes were: Mar- 1.97%, Apr-1.87%, May-1.74% and Jun-1.97%, respectively, semi-detached sales absorbed 9.3%, 8.7%, 10.9% and 5.0% more inventory than was available at the end of the previous month.
And where total sales was down by 667 units month over month, the only class to see a boost in sales within TREB's price ranges was condominium apartments: an additional 27 sold in the under $300,000 range; 13 in the $6-800,000 and 8 above the million dollar mark. Month over month 185 fewer properties traded hands within the $5-600,000 range and while detached homes took the brunt of the hit with 97 fewer sales it also recorded the biggest decrease to any class of property - 119 fewer units in the $7-800,000 category. In fact that wasn't the only negative effect on detached sales.
Detached home prices record no increase since January
Since TREB and the media reports a year over year price change it's gone unnoticed that the median price for detached homes is back to the very same $610,000 it rocketed to in January and uncharacteristically so, February, May and June were all price claw back months. While the inclination of the media and real estate boards is to report year over year changes, that does not accurately gauge changes in value relative to the previous year's high and low. The following two charts demonstrate the importance of such a gauge.
Still focusing on detached values, the first chart shows the monthly movement of the average and median prices relative to the constant previous high and low. Those two numbers are the target by which we can tell if prices are steadily rising, in flux or degrading for non-seasonal reasons. On the left side are the years 2013 and 2012, the right side is 2014 to date. The higher increases in 2014 versus 2013 may suggest that the value is rapidly increasing as it did in 2012 but to a lesser extent. The second chart however paints a clearer picture.
In this second chart the price clawback is obvious. Prior to this year, the median reached its highest point ever very late in the year - October rather than in April or May as is usual. It bounced up dramatically in January to start off the year but instead of a continued increase which again is usual in the spring market, 3 clawbacks erased in its entirety the one and only spring gain. A continued shift through October toward semi-detached homes would mean that detached home affordability has peaked.
In four months we'll know.
Last but not least, two mainstay graphs. Note that since the market rebounded from the crash of the 90's, the increase in average price is a scant three-tenths of a percent shy of the pre-crash increase. Can it go higher?
By Penny Elizabeth Dutkowski, Broker with HomeLife/Bayview Realty Inc., Brokerage-Independently Owned and Operated.
All posts are the express opinion of Penny Elizabeth Dutkowski and should not be construed as that of the Brokerage.
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