It seems that everywhere I go, people are asking me if the I’On real estate market has “turned around”. Well, if you measure a “turnaround” strictly based on increased showing activity and number of sales, we are starting to see some progress. But I believe most people really want to know when there is going to be a “turnaround” in prices. That is going to take some time. In this post, I will try to put this in perspective for you.
I’On Home Sales Are Up in 2010
Showing activity has increased significantly in I’On since the first of the year. As a result, 7 I’On homes went under contract during January and February. This is a big improvement over 2009 when only two homes went under contract during the same period. In addition, 6 I’On homes closed during January and February, compared to only 2 during the same period last year. Below is a list of these 6 I’On homes with their sales prices:
- 298 North Shelmore – $500,000
- 116 Civitas – $582,560
- 126 Ionsborough – $735,000
- 51 Frogmore – $741,000
- 40 Montrose – $750,000
- 27 Fairhope – $800,000
I’On Home Buyers Continue to Buy “Value”
While showing activity and sales are both higher, buyers are still focused on value when making their purchase decisions. For example, of the 11 I’On homes under contract, pending closure, 5 are “distressed” sales, meaning they are either short sales or bank-owned properties. The average asking price of these 11 homes is $249 per square foot. This is a significant discount to the average asking price of $302/square foot for the 67 I’On homes currently for sale. Clearly, buyers are looking for “deals” and in many cases, they are getting them.
A “Balanced” I’On Real Estate Market = 6 Months Supply of Inventory
As I have mentioned in previous posts, a “balanced” real estate market is typically defined as 6 months of available inventory. Anything higher than 6 months represents a buyers market, resulting in pricing pressure on sellers. Anything lower than 6 months is a sellers market, resulting in price advantages for sellers.
I’On Homes for Sale Above $1M – Huge Impact on Months of Supply
Based on the last 12 months of sales activity in I’On and a current inventory of 67 homes, we have a 20 month supply of I’On homes for sale. We are still solidly in a buyers market. For some price ranges, it is more pronounced than others. The chart below breaks down the supply of I’On homes for sale by price range. For every price range, we are still in a buyers market. However, what is particularly significant is the supply of inventory above $1M – 56 months!!!
The bottom line is that I believe we have a ways to go before we see any positive pricing news for sellers in the I’On real estate market. However, real estate markets can change very quickly. If interest rates start to increase as most economists believe they will, we could see a surge in sales this year. I will continue to post updates on the I’On market throughout the year, so stay tuned to this site.
If I can answer any questions about this post or if you are thinking of buying or selling an I’On home, please contact me. My team offers a full range of services and we will be happy to assist you in any way we can.