2011 4q detached quarterly report copy

8/3/2019 2011 4Q Detached Quarterly Report Copy

http://slidepdf.com/reader/full/2011-4q-detached-quarterly-report-copy 1/55

Presentable Market Data Chuck Carr

Office: 770-698-8797

Cell: 678-591-6030

Email: [email protected]

www.ChartMasterServices.com

mailto:[email protected]

mailto:[email protected]



Understanding three views of the current market allows Buyers tomaximize their ability to evaluate properties, receiving the highest

value in their home search and Sellers to position their property to

maximize money in their pocket while minimizing time on market:

• Macro View: National MarketNational Media Coverage

• Metro View: Greater Cleveland Area Market

Quarterly Metro Market Report6-County NORMLS data

• Micro View: Your CommunityComparative Market Analysis

Current Market Overview

3



4Q 2011 Quarterly Metro Market Profile

Provided By ChartMaster Services, LLC exclusively for Keller Williams Realty

Single Family Detached ResidencesNORMLS Cleveland Metro Area (Cuyahoga, Geauga, Lake, Lorain, Medina, Summit Counties)

• Full year 2011 sales were

slightly higher (+.9%) than

those of 2010

• 2011 Sales were -12.5%

lower than in 2009

4






• Monthly sales remained

stronger during the last

half of 2011 compared to2010, with stronger sales

in each month after June,

2011

• Federal home buyer

incentive programs likelycontributed to increased

sales in the last quarter of

2009 and through the first

2 quarters of 2010

5






• Tracking sales monthly since

January, 2008 illustrates the

general downtrend in sales

we have experienced,

generally characterized by

lower high and low sales

each year, during seasonalfluctuations

• The effects of government

purchase incentives on

monthly sales distorted

seasonal trends in Oct.-Nov.,

2009 and magnified themagain in Apr.-June, 2010 after

which a sharp falloff occurred

through Feb., 2011

6



4Q 2011 Quarterly Metro Market ProfileProvided By ChartMaster Services, LLC exclusively for Keller Williams Realty


• 4Q 2011 sales increased by +15.1% compared to4Q 2010 followingdecreases a +23.4%increase in 3Q 2011

• These 2 quarterly salesgains are measuredagainst the same periodsin 2010 which felt theeffects of expiration of the homebuyer incentives in effectthrough 2Q 2010

7





4Q ONLY

• The 4Q 2011 sales

increase occurred in price

ranges below $300K,

contributing to a lower

overall median sales price

8





4Q ONLY

• Higher sales in the Resalesegment, in price ranges below $300K broughtoverall sales up by +15%

• Growth in sales of mid- priced ($100K-$300K) New home contributed toa large percentageincrease in overall newconstruction sales of +52%

• Sales of properties pricedabove $300K weremostly lower than in thesame period of 2010

<$100K

$100K-

$199K

$200-

$299K

$300-

499K

$500-

$749K

$750-

$999K $1.0M+ Total

NEW

2

(-71%)

37

(+85%)

44

(+110%)

23

(+15%)

3

(-25%) N/A

0

(-100%)

111

(+52%)

RESALE2,225

(+27%)

1,492

(+10%)

500

(+2%)

240

(-9%)

51

(-15%)

4

(-76%)

8

(-27%)

4,520

(+14%)

TOTAL2,227

(+26%)

1,529

(+11%)

544

(+6%)

263

(-8%)

54

(-16%)

6

(-65%)

8

(-33%)

4,631

(+15%)

4Q 2011 Sales

Better Same Worse

Comparison to 4Q 2010:

9

NORMLS data for single family detached residences. Data is believed to be accurate, but is not warranted. ©2012 Chartmaster

Services, LLC. All rights reserved. This page may not be reproduced without the written permission of [email protected].





• 4Q 2011 Foreclosuresales as a percent of total

sales were +2.4 percentage points higher than in 4Q 2010

10





4Q ONLY

• The overall percentage of foreclosures was higher in3Q 2011 than in the same period in 2010 resultingfrom increases in priceranges below $200K

11





• Short Sale transactionsdeclined as a percentage

of total transactionsduring the last 2 quarterscompared to both thesame periods in 2010and to the recent high point in 1Q 2011

12





4Q ONLY

• 4Q 2011 Short Saletransactions occurredonly in the <$750K price

ranges and were mostlylower than during 4Q2010

13





• When Short Sales areadded to ForeclosureSales they make up

Distressed Sales, shownhere as a percent of totalquarterly sales

• 4Q 2011 distressed saletransactions were +1.6 percentage points higher than in 4Q 2010 andwere -9.4 percentage points lower than thehigh in 1Q 2011

14





4Q ONLY

• Shown here by pricerange demonstrates thedegree to which 4Q 2011distressed sales are

concentrated in the<$100K price range

• More than 1in 3 all salesin the <$100K price rangewere distressed salesduring 4Q 2011, while 1in 5 sales overall were

distressed

15





• Buyers chose to purchase properties in Cash sales inmore than 1 of every 3transactions during 2011,up by +6.8 percentage

points from 2010

• A corresponding drop of -4.8 percentage points inFHA purchases showssome shifting away fromfinancing, possibly due toinvestor purchases of lower price properties andthe difficulty of obtainingfinancing

16





4Q ONLY

• Distressed propertiesnearly 4 times morelikely to be financed bycash purchase as by

conventional loans during2011

17





4Q ONLY

• Shown here by pricerange demonstrates thedegree to which 4Q 2011cash sales were

concentrated in the<$100K price range

• Nearly 60% of all salesfor prices <$100K werecash purchases, with non-distressed salesrepresenting a larger

portion than distressedsales

18





• As sales increased in 4Q

2011, the median sales

price fell by -8.7%

• This change reflects the

shift of purchases toward

lower priced properties

during 4Q 2011

• The full-year 2011median sales price was

also -7.8% compared to

2010

19





4Q ONLY

• The median sales price is

derived by taking the

point at which half of the

transactions were at

prices above and half

were at prices below that

price

• The overall 4Q 2011

median sales price was

lower than that of 4Q

2010 due to a higher

portion of sales of properties priced below

$100K

20





• Median sales prices declined

fairly steadily through many

of these quarterly periods

• Exceptions occurred during

the period of government purchase incentives from 3Q

2009 through most of 2Q

2010

• Since then there have been

smaller fluctuations in

quarterly comparisons withdeclines in 3 out of 4

quarters in 2011

21





• Monthly median sales prices reached a low pointduring this period inJanuary, 2009

• Normal seasonal patternswere affected during the

homebuyer incentive periods in late 2009through mid-2010

• With those externalinfluences out of the waynow, we will be better ableto follow real market trends

• If this trend continues,Buyers seeking to buy atthe bottom of the marketmay have already missedthat point

22





• Appreciation of how buyers can be attracted todistressed property

purchases becomes easier when the median sales price for distressed properties was -67%lower than for non-distressed properties in3Q 2011

• This doesn’t imply thatthe properties are similar, but rather that purchasersare focused on low-priced properties in this phase of the market and distressed properties tend to fall intothose price ranges

24





PREVIOUS LISTING PERIODS DATA INCLUDED

• The median of Sales Priceas a percentage of the

Original Listing Price fell

again in 4Q 2011 by -1.3

percentage points

compared to 4Q 2010

• Lower S/L price ratios

result from buyer price

resistance, forcing

sellers to negotiate to a

lower percentage of

their asking price in

order to reach a sale,

which is a likely

indication that Sellers

are not pricing correctly

for this market

25






4Q ONLY

• 4Q 2011 sales by price

range show that most of

the -1.3 point decline in

the overall median S/L

ratio came from the

<$100K price rangewhich fell -4.2 percentage

points

• Price ranges between

$100K and $499K were

able to maintain or increase their S/L ratio

compared to last year

26






• Median S/L ratios shown

monthly since January,

2008 reveals that the

bottom during this period

was reached during 1Q

2009

• A downward trend since

May, 2010 is likely due to a

combination of overall

market slowing after the

expiration of buyer

incentives, normal seasonaleffects and the continued

high inventory of distressed

properties

27






• In the period since June, 2008, it

appears that sellers of non-

distressed properties have been

able to adjust to the market

enough to see a decline of about

-5 percentage points in medianS/L ratios, while sellers of

distressed properties have

declined by nearly -13

percentage points from the high

in Feb., 2010

28






• The 4Q 2011 median of

Days-On-Market (DOM)

increased by +6.8%,compared to the same

period of the previous

year

29






4Q ONLY

• Four of these seven price

segments had a median

DOM higher in 4Q 2011

than in 4Q 2010, while

those above $750K were

lower

• Increases in the high-

price, low-volume ranges

will not weight theoverall median

significantly

30






4Q ONLY

• The median of DOMsegmented by Sales Priceand New vs. Resale,

shows an overall increaseof 8% in time-on-marketfor Resale propertieswhile New homesdeclined by -31%

• The overall increase came

mostly from Resale properties, particularlythose priced below$300K

$<100K

$100K-

$199K

$200-

$299K

$300-

499K

$500-

$749K

$750-

$999K $1.0M+ Total

NEW 49 Days-82%

127 Days-29%

141 Days-42%

152 Days+39%

508 Days+5%

N/A N/A 138 Days-31%

RESALE112 Days

+17%

132 Days

+9%

140 Days

+5%

148 Days

-12%

339 Days

+74%

301 Days

-27%

174 Days

-63%

125 Days

+8%

TOTAL112 Days

+15%

131 Days

+8%

140 Days

+4%

149 Days

-6%

348 Days

+76%

301 Days

-27%

174 Days

-57%

125 Days

+7%

4Q 2011 Median Days on Market

Better Same Worse

Comparison to 4Q 2010:

31








• The percentage of sales inwhich the Seller was requiredto reduce the listing price inorder to attract a Buyer,remained above 64% during2011, reaching a high of more

than 67% of transactionsduring 2 of the 4

• Continued pricing pressurefrom distressed propertiesand overall economicconcerns resulted in buyer caution causing this percentage to increase after

government incentivesexpired in 2010 and remainhigher since then

32






4Q ONLY

• Even though the overall

percentage of transactionswith a price reductionwas higher than last year,only 3 of these priceranges had a higher median

33






• When a price reduction isrequired, the Seller usually negotiates to alesser portion of theOriginal Listing Pricethan a Seller not requiredto take a price reduction

• The 4Q 2011 percentage point difference of -19.2would amount to a netreduction of -$24,000from the original list price at the median sales price, compared to a

Seller without a pricereduction

34






4Q ONLY

• When a price reductionwas required,substantially lower S/Lratios occurred in all price ranges in 4Q 2011, but there were largedifferences in degree

among the various priceranges

• For example, the ratio for a price-reduced propertydropped a whopping-34.5 percentage points, below that of a non-price

reduced property, in the<$100K range, where thedifference was -11.2 percentage points in the$300K-$499K range

35






• Even after taking a pricereduction, Sellers realizeda lesser portion of their new list price than thoseSellers who were not

required to reduce their price

• Had these price-reduced properties been correctly priced originally, theycould likely have sold in

much less time at a higher price

36






4Q ONLY

• Even after taking a pricereduction, Sellers usuallyrealized an equal, or lesser, portion of their

new, reduced list pricethan those Sellers notrequired to reduce their price

• Pricing correctly with thecurrent market results in a better net selling price, in

less time on market

37






FULL YEAR

• Correctly pricing with thecurrent market can resultin multiple offers andsales at prices above theOriginal Listing Price

• In 2011, nearly 1 out of every 10 (10.2%) salestransactions resulted inselling prices that wereequal to or higher than

the original listing price

38

Si i i






• When a price reduction isrequired, more marketingtime is needed to attract a buyer

• A Seller required to take a price reduction in 4Q 2011needed a median of 198 daysto sell, compared to only 35days for a Seller who pricedcorrectly with the market – adifference of +5.2 months, or +5.7 times, longer to sell

• The results are higher carrying costs, greater inconvenience due to keepingthe house in showingcondition and delays infinding and moving to a newhome

39

Si l F il D h d R id






4Q ONLY

• Higher-priced propertiesnormally take longer to sell, but when a price reductionwas necessary in 4Q 2011,the differences weresubstantially greater in all price ranges

• Sellers across these priceranges needed 5.7 timeslonger to sell when a pricereduction was required

• Conversely, Sellers pricing

their property correctly for the current market, were ableto sell in a very reasonabletime period – a median of 35days across all price ranges

40

Si l F il D h d R id





• Failed listings (Expired+Withdrawn) are shown here asa percentage of total“finalized” listings (Expired +Withdrawn + Closed)

• The high failure rate of listingsoffers evidence of the strongBuyer price resistance in thismarket, since listings usuallyfail due to overpricing

• The 4Q 2011 average failurerate was lower than that of 2010 at 57.0% of finalizedlistings during the quarter

• The percentage of failedlistings typically drops duringthe first half of each year asthe pace of the spring marketimproves

41

Si l F il D t h d R id






4Q ONLY

Total Closed Listings(100%)

84.0% S/L*

125 DOM*

Price Reduced

(67.1% of Total)

76.5% S/L*

192 DOM*

Previously Listed(29.5% of Total)

67.7% S/L*

339 DOM*

Not Previously Listed(37.6% of Total)

81.5% S/L*

127 DOM*

No Price Reduction

(32.9% of Total)

95.7% S/L*

35 DOM*

Previously Listed(.8% of Total)

90.7% S/L*

212 DOM*

Not Previously Listed(32.1%Of Total)

95.7% S/L*

34 DOM*

Priced Right OriginallyChased the MarketChased the MarketChased the Market

What’stheREALSTORY?

Many times listed properties will haveexpired or been withdrawn one or more

times prior to the listing period in which

they sold. Including the original listing

prices and cumulative days on market from

those previous listing periods, results in a

more realistic set of measurements.

* Medians: Half are

above and half are

below

42









4Q ONLY

• We have seen that out of

every 100 finalized listingsin 4Q 2011, 57 failed to sell

and 43 sold

• Of the 43 closed listings, 29

(67%) required a price

reduction, including

original listing prices from

previous listing periods, in

order to attract a Buyer

• Therefore, if 57 failed to sell

due to overpricing and

another 29 required a price

reduction in order to sell,

86 out of every 100 listings

were initially overpriced in

4Q 2011, resulting in either

no sale, or a sale at a much-

reduced price after a much-

longer listing period

43








4Q ONLY

Cleveland Area Buyer’sMarket

Only 14% of the 4Q 2011 Cleveland housing inventory was initially priced “in the market”

Price

vs.

Competition

Out of

The Market HomesthatDon’tSell

Poor

Below

Above

Great

57%

In the MarketHouses that Sell in a median

of 35 days

57%14%

29%

Condition vs. Competition

Chased

The

Market

44






• The number of months of supply vary widely among

the market segments shown

by price range and New vs.

Resale properties

• Overall the supply was at 8.8

months, meaning that at the

current monthly sales rate, it

would take 8.8 months to sell

the September listing

inventory, if no new listings

came on the market

• The generally accepted

dividing point between a

“Buyers” and “Sellers”

market is at 6-7 months of

inventory putting all

segments into a Buyer’s

Market condition

<$100K

$100K-

$199K

$200K-

$299K

$300K-

499K

$500K-

$749K

$750K-

$999K $1.0M+ Total

NEW 11.0Months

17.2Months

17.0Months

20.8Months

41.0Months

16.5Months

N/A 18.6Months

RESALE7.5

Months

8.5

Months

9.4

Months

10.9

Months

16.3

Months

39.3

Months

53.4

Months

8.5

Months

TOTAL7.5

Months

8.7

Months

10.0

Months

11.8

Months

17.5

Months

35.8

Months

56.1

Months

8.8

Months

Better Same Worse

December, 2011 Months’ Supply of Listings (Using 3-mos moving average of sales)

45

Compared to Seller’s Market

condition (6.0 Mos.)








• Viewing overall supply

against the industry

benchmark for a “balanced”

market shows that current

levels in all price rangesremain in a “Buyer’s Market”

condition, above the 6-7

month level

• Supply was very close to the

“Balanced Market” condition

for properties priced below

$100K

46






• Although the overall supply

of properties in December,2011 was at 8.8 months,

when Distressed properties

are separated out, the picture

changes for non-distressed

properties, rising to a 9.3-

month level

• Distressed property supply is

also in a Buyer’s market

condition in all segments

except the <$100K and

$750K+ price ranges with

overall supply at 6.6 months

while non-distressed is at 9.3months

• Two other price ranges for

distressed properties are in

the “Buyer’s Market”

condition, also

47






• Sales: Full Year 2011 +.9% higher than 2010, -12.5% compared to 2009• Monthly sales increased in each of the last 6 months this year compared to the same period last year, resulting in a+15% quarterly increase compared to 4Q 2010

• The Foreclosure percentage was slightly higher in 4Q 2011compared to 4Q 2010, at 15.4% of quarterly sales, whileoverall distressed sales were up by 1.6 percentage points at 20.3% of 4Q 2011 sales

• Distressed sales were 33.7% of 4Q 2011 sales in the <$100K price range

• Cash purchases represented 34.7% of all sales in 2011, up from 27.9% last year`

• Sales Prices: Median declined by -8.7% in 4Q 2011 compared to 4Q 2010

• Percent S/L price: Median 84.0%, -1.3 percentage points below 4Q 2010• Days on Market: 125 Days, +6.8% higher in 4Q 2011 than in Q 2010

• Price Reductions: High – at 67% of 4Q 2011 transactions, +1 percentage point higher than in4Q 2010 and up by 5 percentage points for the full year

• A large drop in % S/L ratio occurred when a price reduction was taken (-19.2 percentage points in 4Q 2011)

• <$100K price range impact of price reductions on S/L ratio was greater (-34.5 percentage points) than for other priceranges

• DOM effect – 5.2 months (5.7 times) longer needed to sell after a price reduction in 4Q 2011

• Failed Listings: 57.0% of listings in 4Q 2011

• Overpriced Listings: 86% of listings initially overpriced in 4Q 2011

• Supply: December, 2011 at 8.8 months of supply – New Construction supply at 18.6 months

Summary

48



Single Family Detached Residences





• Significant Market Observations – Full Year sales were slightly higher than last year (+.9%) – more than +15% higher in the last 3 months

– Distressed properties represent a significant percentage of total sales – 20% representing a continuedabnormal depressant on sales prices

– Median sales prices trended down compared to last year – Resulting from of continued availability of lower- priced Distressed properties

– Median S/L ratio was also lower – 84.0%, down by -1.3 percentage points from the same period last year –

More difficult negotiating environment for Sellers due to an abundance of lower-priced distressed properties – Median time on market longer than last year – 125 days, up 6.8% - High overall inventory increases

competition for buyers among Active listings

– Incidence of price reductions high – 67% of 4Q transactions – Results of high inventory of Active listings andlower-priced Distressed Properties

– Initial listing prices too high – 86% initially overpriced – Sellers not fully compensating for currentcompetitive environment consequences

– Overall months of Active listings supply still very much in a Buyer’s Market condition – 8.8 months – Supply of non-distressed properties were also above the 7 month “Buyer’s Market” threshold

49

The Story of the Detached Residence Market – 4Q 2011








• Importance to Sellers – Current Buyer price resistance remains very high due somewhat to availability of lower-priced distressed

inventory alternatives, making high-value initial listing prices essential

– Distressed properties are dictating prices for non-distressed properties

• Importance to Buyers – Unusual opportunity for high-value purchases - declining prices, distressed property availability and anxious

sellers

– Supply of distressed properties nearing or below balanced market conditions in most price ranges potentiallyincreasing buyer competition for those properties

– Quick action and serious offers are required when high-value properties are found, since low median DOMand high S/L ratios usually result

50









• Success Strategies for Sellers – Choose to factor in the impact of distressed properties competing for buyers in seller’s price range and

location, when setting initial listing price

– Maximize selling price and minimize market time by choosing an initial listing price that represents highvalue compared to competing listings

– Constantly re-evaluate market trends to re-assess pricing choice – avoid chasing the market

• Consequences of Wrong Seller Choices – Sell after a much longer time on market - Median DOM 6.4 times longer

– Sale at a much lower portion of original listing price – median of -26.9 percentage points lower if listedmultiple times

– Fail to sell – 47.4% of all listings failed to sell

– Multiple listing periods – 36.3% of sellers required multiple listing periods, selling at a median of -25.2 percentage points of original list price lower after a median of 11 times more days on market

51






$ Sales Price

X_______%

$ Listed Price $ Listed Price

$ Sales Price

X_______ %Median L/SP%

___Quarter

Required ____Days Required ____DaysMedian DOM

___Quarter

Desired Seller Price Suggested Market Price

Summary

Even though the Suggested Price is $ __________________ Lower than the Desired Price, the

Faster Sale Nets the Seller $ ____________________ More and Saves __________Months in Time

The Case for Getting it Right the First Time

330,000 300,000

84.3 95.5

30,000

286,500

204 59

+$8,310

278,190

-4.8

(Used S/L %’s for

this price range)

(Used DOM’s for

this price range)

(Illustration using 3Q2011 $300K-$499K

price reductionnumbers)

52







4Q ONLY

• When a price reductionwas required,substantially lower S/Lratios occurred in all price ranges in 3Q 2011, but there were largedifferences in degree

among the various priceranges

• For example, the ratio for a price-reduced propertydropped a whopping-32.5 percentage points, below that of a non-price

reduced property, in the<$100K range, where thedifference was -9.1 percentage points in the$200K-$299K range

53







4Q ONLY

• Higher-priced propertiesnormally take longer to sell, but when a price reductionwas necessary in 3Q 2011,the differences weresubstantially greater in all price ranges

• Sellers across these priceranges needed 6.4 timeslonger to sell when a pricereduction was required

• Conversely, Sellers pricing

their property correctly for the current market, were ableto sell in a very reasonabletime period – a median of 31days across all price ranges

54

Th C f G tti it Ri ht th Fi t Ti



$ Sales Price

X_______%

$ Listed Price $ Listed Price

$ Sales Price

X_______ %Median L/SP%

___Quarter

Required ____Days Required ____DaysMedian DOM

___Quarter

Desired Seller Price Suggested Market Price

Summary

Even though the Suggested Price is $ __________________ Lower than the Desired Price, the

Faster Sale Nets the Seller $ ____________________ More and Saves Months in Time

The Case for Getting it Right the First Time

2011 4q detached quarterly report copy

Documents