Market summary courtesy Michael Orr of The Cromford Report early July 16, with a few points highlighted in blue:

“The market conditions improved a little for sellers during June, with the Cromford® Market Index breaking through the 140 level as we enter July. However there is no dramatic new trend, just a continuation of what we have been seeing for several months now. Sales volume was strong during June but it is clear that July will be much quieter for closings since the number of homes under contract has fallen quite a bit. This is quite normal for the season.

The ranges from $200,000 to $350,000 saw strong growth in closed sales over June last year – up almost 19%. Between $350,000 and $400,000 we saw a little weakness, down 2%, but sales from $400,000 all the way up to $1.5 million were strong – up an impressive 21%. Sales over $1.5 million were very much weaker than last year – down 44%. Sales below $175,000 were also well down, but this was caused by a lack of supply. The segment over $1.5 million cannot use that excuse. There are plenty of homes available, even though a large number have been removed from the market for the summer. Many of these are likely to be relisted at the end of September.

At first sight it looks as though pricing was strong during June, with the median sales price up 2.2% from last month. However this is deceiving because the average home price only rose 0.3% and the average home size jumped 1.3% from 1,978 in May to 2,004 in June. The average price per square foot retreated 1.0% over the month, and we see this as more accurate measure than the median sales price.

We expect overall prices to be flat to slightly lower over the next 3 months as luxury homes make a smaller contribution when the temperatures exceed 100 degrees. Prices are still rising below $200,000 and falling for most homes over $1 million.

Dollar volume in June was a healthy $2.529 billion, up 7% from June 2015, with about half of that coming from higher sales volume and the rest from higher pricing.

The main difference we saw between May and June was an improvement in demand for homes in the lower ranges of the luxury market, between $500,000 and $1.5 million. In particular:

• $500K-$600K saw an increase of 30% in dollars spent (compared with June 2015)
• $600K-$800K saw an increase of 20% in dollars spent
• $800K -$1M saw an increase of 24% in dollars spent
• $1M-$1.5M saw an increase of 27% in dollars spent

There is a big contrast above $1.5M:

• $1.5M-$2M saw an increase of 2%
• $2M-$3M saw a decrease of 41%
• $3M and over saw a decrease of 61%

Mind you, June 2015 was a very good month for the super-luxury market so the comparison is quite tough for June 2016.”

Please call or email if you want to know how your house or potential purchase fits in with the current market.  Happy 4th!