Where are prices headed in 2017? We're keeping an eye on three critical numbers.
In 2016, the average sales price for a home in Panama City Beach was up 7%. But to understand where prices might be headed in 2017, you, or your agent :), need to know a few basic numbers that relate to supply and demand.
Active Listings - This line in the charts below represent how many homes are for sale at any given time. If the line goes up, there are more homes for sale. If the line goes down, there are less.
Sold Listings - Represented by the black line in the charts below, this shows us just how many homes are sold/closed.
Months Inventory - This number is essential to understand. The first thing to know is that this figure represents just how long it will take to sell all the homes that are on the market at the current RATE that they are selling. 5 - 6 "months of inventory" represents a neutral, healthy real estate market. Anything under 5, generally means a seller's market because there are fewer homes for sale. Buyers have less choice, and prices tend to stay pretty strong in a seller's market. Any number of 6 becomes a buyer's market...the higher the number, the more extreme of a buyer's market it becomes. It a buyer's market, sellers have more competition since there are more houses for sale and prices soften or decline.
In the chart below, represented by the top blue line, the number of homes for sale (Active Listings) has been steadily increasing since November of 2015. At some point, if we have TOO much supply, this could hurt pricing. The "Months of Inventory" number (columns) shows that we are still in a solid seller's market for housing (around four months) but drifting more towards a neutral market.
This next chart focuses on NEW CONSTRUCTION ONLY and tells a similar story. We are adding more and more homes to the market (top blue line) while the number of sales is steady (Sold Listings). Like the overall market, new construction is still in a solid seller's market at around four months of inventory but again, trending towards a more neutral market (see below):
When we break things down by price, it gets more interesting. Homes in PCB priced up to $250,000 are shown below. Like the rest of the market, we added a lot of homes for sale (Active Listings) in 2016 which moved us from a seller's market of around four months of inventory to a bit of a buyer's market at over seven months of inventory (see below):
Homes priced from $250,000 - $500,000 showed similar activity but notice the "Months Inventory" number here (see below). It has gone from around 5 in May to around 13 just by December!
It gets even more dramatic when you look at homes priced over $500,000. October, November, and December saw almost 60, almost 70 and almost 50 months of inventory. Wow! Definitely a buyer's market (see below):
With most price ranges trending to a softer market, anyone SELLING in 2017 will certainly need to "Love Their Listing!" Let us know if we can help.