During this episode of TMC John discusses the October housing statistics.
JOHN: Hey, guys. Tuesday Morning Coffee. Mmm, that’s good coffee. Talking about market statistics for October. Another crazy month. Last month, if you recall, was a really big jump in our percentage rate of closed sales and pending sales. This month, same thing. We’re up 30% over last October. We’re up 21% in pendings, which means we’re probably going to have a big November as well compared to last November. Year to date, we’re up. We have sold 9.4% more homes than we have last year. I anticipate that to get to at least 10% by the end of the year.
Our average days on the market are down 61 days, 61 days in October of this year, 68 days last year. Our average closed price is up from 181,000 to 192,000, so $11,000 increase in average closed price. Things keep trending up. I’m not 100% sure why. I know these rates are still low. How long they’re going to stay low, who knows? I’ve been thinking they were going to come down for three years now, so what do I know when it comes to figuring out rates? I don’t know anything.
What are we seeing going forward? I think we’re going to stay pretty vibrant. I see that a lot of people back at work. Our foreclosures are way down over what they were. I think they’re kind of washing out. The one thing I think we’re going to have to pay attention to, the cost of construction coupled with the fact the cost of development has gone up for a lot of different reasons. Materials, regulations, water tap fees. For instance, in the county right now our water tap fee was $1,000. Instead of just raising it a few hundred bucks, gradually, they raised it to $2,800. Well that $1,800 somebody’s got to pay for it, and ultimately it’s the buyer of the home.
The electric company is charging where they used to go into subdivisions and supply the electricity, Middle Tennessee Electric did to have the customer base. Now they’re charging upwards of $900 per lot. That used to be zero, so I’ve just given you $2,700 right there and nothing’s been—you don’t really get anything else for it than what you were getting before the charges. So there’s a lot of things going up, and it’s going to make the cost of development, the cost of lots are going to be more expensive, which the market’s going to have to work it out for us. But bottom line is builders are going to have to really be smart and probably not be able to give you as much in the home if it’s the same square footage. And of course, gradually, the prices are going to go up.
Anyway, that’s what I have. Call me if you need anything real estate related, 867-3020. Thank you.