Home sales in the upper price range have many people baffled, not just buyers but also sellers, and believe it or not, even Realtors. Many questions abound: How are sales for more expensive homes lately? How do they compare with the past? How long does it take to sell an upper priced home? Is is that much longer than homes selling in the average price area? Today, I’ll help to answer these questions.
I want to focus on sales above $500,000, and I’ve pulled sales data over every year back to the beginning of 2012. Then I’ve compared a period of time during most of the recession we’ve been experiencing from 2012 to the end of 2016 to the last three years in which the Sequim real estate market has substantially improved and prices have increased. How does all this play out for the upper priced homes?
This is one of those charts you could stare at for a half an hour and still be drawing possible interpretations and conclusions. What I wanted to see is how home sales are going for the homes above $500,000 in the past three years compared with previous years.
It is quite dramatic that Sequim home sales above $500,000 increased as a percentage of total sales to 19.2% of sales since 2017 compared with only 7.6% in the previous five years. They also increased in Port Angeles to 6.3% from 3.2%. Certainly there has been a substantial increase in the sales of upper priced homes, but why?
First, prices have increased over the past three years by 29% based on the sales numbers on the right side of the image above. You can see that the average sales price increased to $344,185 from $266,650. That’s huge. I’ve been saying that prices have increased over the past three years by about 30%, and this stat shows that was almost dead on.
Second, the inventory of the ideal home retirees want is extremely low. That drives up prices, too, but it also has the effect of motivating buyers to buy nicer homes when they can’t find what they want in the lower price ranges.
All of this doesn’t mean that a home listed above $500,000 will sell quickly. This segment of the market still consists of a small part of the buyer Universe, and Sequim’s buyers come in small numbers throughout the years, so the right buyer will come when they come, and that could be soon or many months away. Compare the data and conclusions in this article with what I published on this blog on December 23rd, 2008 about Why a Home Over $500,000 Is Almost Impossible to Sell.
As I’ve said elsewhere, the key for a seller and their listing agent is powerful and effective marketing, and that’s a topic for another day.
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