Pinehurst Real Estate – 3rd Quarter 2010 Real Estate Report

The real estate market slowed in the third quarter with sales falling behind the levels of both Q3-2008 and Q3-2009.  With the expiration of the most of the home buying tax credits, this is not a complete surprise. 

View the Raw Data for Q3 – 2010 (including 2006-2009 Q3 Comps)

View Specific Data For Single Family Homes 

Our own internal data suggests that some of the Q1 and Q2 home sales would have occurred in Q3 had the tax credits not been in place.  In other words, would-be Q3 buyers purchased in Q1 or Q2 in order to take advantage of the tax credits.  We have no data supporting the proposition that the tax credits encouraged people to buy who would not have bought in 2010 anyway.  Although we cannot be sure if this is true across the entire market, we suspect that it is true as McDevitt Sotheby’s sales represent a statistically significant share (7%) of all market sales for the period.

At the same time, we do not believe that the tax credit programs moved Q4 2010 sales into the first half of 2010.  We project that 2010 year end sales numbers will be slightly better than 2009 and 2008.

The market for higher priced homes remains very sluggish and in fact has essentially evaporated.  Our internal data suggests that potential buyers in the high-end market segment are remaining on the sidelines waiting for the economy to improve.  The most common sentiments expressed by potential buyers who are: (1) they are waiting to sell a home in another location before buying in the Pinehurst Area, and (2) that they are waiting for the November election results before making any buying decisions.

As we have said in previous market reports, it is our opinion that it could take several years before we see the return of 2005-2007 levels of sales activity in our market.

Quarterly Data – Q3 2010

In Q3 – 2010, there were 249 home sales in Moore County.  This figure includes single family homes (214), condos (30) and Horse Farms (5).  Land and commercial properties are not included in the sales data.  The total sales volume was $60,912,663, yielding an average home sale price of $244,629.  In Q3 – 2009, there were 269 sales with an average price of $258,280.   While the number of sales bested Q2 from both 2009 and 2008, the average home price has dropped well below 2006 levels.  This reduction is partially related to lower values across the board, but it is significantly affected by drastic losses in the sale of higher priced homes.

2010 – 3rd Quarter:    249 Home Sales
                                    $244,629 Avg. Price

2009 – 3rd Quarter:    269 Home Sales
                                    $258,729 Avg. Price

2008 – 3rd Quarter:    320 Home Sales
                                    $267,852 Avg. Price

2007 – 3rd Quarter:    407 Home Sales
                                    $270,856 Avg. Price

2006 – 3rd Quarter:    437 Home Sales
                                    $261,224 Avg. Price

View the Raw Data for Q3 – 2010 (including 2006-2009 Q3 Comps)

View Specific Data For Single Family Homes 

3/4 Year Data – Q1+Q2+Q3 Combined

Comparing the first 9 months of 2010 to the same period in previous years. 

2010 Q1 thru Q3:        774 Home Sales
                                    $248,346 Avg. Price

2009 Q1 thru Q3:       673 Home Sales
                                    $249,474 Avg. Price

2008 Q1 thru Q3:       880 Home Sales
                                    $267,862 Avg. Price

2007 Q1 thru Q3:       1,223 Home Sales
                                    $263,848 Avg. Price

2006 Q1 thru Q3:       1,429 Home Sales
                                    $254,484 Avg. Price

The Good News

• 2010 is still on track to outperform 2009 when year end numbers are tallied.  We don’t expect 2010 to be significantly better, but we think that even a slight increase will signal that the market is beginning the long march back to health. 

• The market for houses in the median price ranges has nearly recovered from market highs in 2006.  Specifically, in Q3 of 2006, there were 114 sales of homes from $200,000 to $300,000.  In Q3 of 2010, by comparison, there were 100 sales in this price range.

• Interest rates remain at record lows, making it a great time for qualified buyers to make home purchases.

• Inventory levels for homes priced under $400,000 are beginning to return to the norm for a healthy market; and this is good news for home sellers at $400k and under.
• For Buyers, good deals do exist in some market segments due to higher than normal inventories.  Pinehurst Real Estate Deals

• The inventory of Condos is very high and we believe there will be very competitive prices in this market segment for at least several Quarters.

The Not So Good News

• Q3 2010 was the weakest quarter on record for the Pinehurst Area Real Estate Market across the board.

• Total inventory levels of homes for sale still remains above normal.  The Pinehurst Area MLS would normally have an inventory of about 950 of single family homes at this time of year.  As of September 30, 2010, there were around 1,060 single family homes for sale in Moore County, compared to about 1,090 on September 30, 2009.  Inventory is still above normal, but not quite as high as a year ago.  More Info About Pinehurst Home Inventory Levels.

• Average home prices are down to 2004 – 2005 levels across the board.

• Banks are still very reluctant to make large loans on higher priced homes.  This combined with other factors has resulted in homes priced above $500,000 piling up on the market.  The inventory for higher priced homes is far above normal and as a result, some sellers are beginning to drop prices drastically.  The price drops could have a drastic impact on higher priced homes.

• As of Oct 1, 2010, there were 204 homes on the market priced over $600,000.  In the previous 12 months, there have been 31 sales of homes for over $600,000.  This equates to more than a 6 year market supply of homes priced over $600,000.  Under normal market conditions, there would be about a 1 year supply of homes on the market at this price level.

SINGLE FAMILY HOME SALES DATA – MOORE COUNTY

Check out detailed info for Single Family Homes, Golf Front Homes and Waterfront Homes here.  This following data covers only single family homes in Moore County (no condos or horse farms). 

This data is interesting because it shows that while overall single family home prices in Moore County have declined since 2007, homes with certain unique amenities (golf front and waterfront) have already returned to 2007 values.  We have also seen this same theme in prior months and quarters in 2010.