Real estate is on the move in Gwinnett! According to latest data, Gwinnett’s pending sales rose to a nearly three year record level of 931, in March 2010. Pending sales represent offers reached between buyer and seller, which are in the process of making the long journey to the closing table. Will every one of these offers close? No. However, most of these will make it successfully through the closing process further shrinking existing inventory and making great places for people to live.
Let’s take a closer look. The number of contracts written is important because it shows us a good example of current buyer demand. Many events can curtail a successful closing, but that doesn’t take away from the point that buyers are ready to buy. Some challenges to reaching the closing table are, appraisal issues, final loan underwriting or the inability for buyer and seller to reach agreement on repairs are just a few. However, as long as the buyer remains qualified, he or she will move on to the next opportunity and begin again. So, while closing data is still the final measure of success, contracts written helps us see which way we’re moving. We must look back to the 975 contracts in June 2007 to find a month greater than the 931 contracts of March of 2010.
What’s a shot of good news without a dose of reality to follow? While pending sales are on the rise, values continue to remain low. Average sales price for Gwinnett in March 2010 came in at $166,491, which is considerably lower than the March 2007 figure of $229,676. In 2008, Gwinnett’s average sales price started the first half of the year in the $200’s eventually falling to finish the year at $180k. In 2009, average sales price dropped a bit lower, ultimately moving up and down in the $170k to $160k price range. The less dramatic price swings in 2009, combined with the March 2010 average of $166,491 almost matching that of March 2009’s $166,876 give hope that we may have formed a bottom. This is great news moving ahead, but don’t expect prices to climb back up as quickly as they fell.
So then, what’s moving you ask? In Gwinnett the price point knocking it out of the park is from $100k to $200k. Over the last six months 1,700 homes in the $100k to $200k price range sold in Gwinnett County. The next highest performing price block was up to $100k with 962 sales over the past six months. In third position was the $200k – $300k price block with 519 home sales. Gwinnett home sales above $300k saw only 299 transactions over the last six months. There are several reasons for increased movement in the lower price blocks. One thing to consider is that many of the homes selling today were in higher price blocks a couple of years ago. Additionally, we come back around to buyer behavior. The slowdown in our economy has dramatically impacted what people are able and willing to spend. Today’s ready, willing and able buyer is likely more frugal, does not want to become “house poor”, expects more for the money AND doesn’t have an existing home to sell. First time home buyers are giving a tremendous boost to our market, and it’s not just because of the tax credit. First time home buyers will continue to buy after the credit expires because they can! Today’s first time home buyer is far savvier than in years past and they recognize great opportunities. Remember, more first time home buyers in the market will eventually give the person looking to sell and move up a market for his/her home, enabling that move up purchase to happen. For this reason, I expect the below $300k price points to continue to lead the way back to a more pleasant market. Now…I’d better remember what I did with my patience!!!