Just A Blip, Or Something More
January 21, 2008
Sales of previously owned DFW luxury homes dropped by 23.0 percent in December, with 151 MLS-listed homes reported sold this year versus 196 homes the same month a year ago. This caused sale volume for the past three months to also fall, by 5.1 percent.
When compared with 2006 sales, however, luxury home sales for 2007 were up by 7.1 percent, which comes on top of annual sales growth of 7.0 percent in 2006. While December's big slide in sales may or may not signal a change in the generally consistent sales growth that the DFW luxury homes market has been experiencing, the fact that it occurred does demonstrate the local market is less insulated than before from what is happening nationally.
The average price of DFW luxury homes sold during December increased only slightly, by .3 percent, when compared to the average price of similar homes sold during the same month a year ago. Revisions in previously reported results caused average prices for the past three months to fall by 1.3 percent.
Luxury homes selling for $1 million and less continue to be where average prices are decreasing from one year to the next. The weighted average square foot price for homes that sold for $500,000 up to $750,000 during the three months ending in December was $159.26, a 2.9 percent decrease from what similar homes sold during the same period last year. Homes priced at $750,000 up to $1 million sold for an average $200.84 per square foot, down 1.7 percent from a year ago. The square foot price of homes selling for $1 million up to $1.5 million was $250.18, a 3.2 percent increase. Homes selling for $1.5 million up to $2 million, with an average price of $320.14, were up .6 percent. The largest increase in weighted average square foot price continued to be for homes selling for more than $2 million. The average square foot price of these homes increased 4.3 percent.
The number of DFW luxury homes listed for sale dropped to about 2,035 homes at the end of December, according to data compiled by North Texas Real Estate Information Systems Inc. This represents an 11.3 percent drop from the 2,295 homes listed for sale a month earlier, but it also is 18.7 percent higher than the 1,715 homes for sale at the same point in time a year ago.
The supply of existing homes listed for sale, measured against December sales, was 13.8 months. This represents a 19.0 percent increase from November's revised 11.6 months supply and a 51.3 percent jump from the 9.1 months supply of DFW luxury homes that were available for sale during December last year.
Average time on market of homes that sold during December was 89 days, up 2.3 percent from the revised 87 average days needed to sell a DFW luxury home in November, and 21.3 percent more than the 73 average days that sales of similar homes required during December a year ago.
Market Highs And Lows
The DFW luxury home enclave with the largest annual increase in its three month rolling average prices was the North Dallas area, which experienced a 4.3 percent increase. The Northeast Tarrant County area, where average luxury home prices increased 3.2 percent, was next highest.
The Southwest Collin / Southeast Denton Counties area again saw the largest annual average price decrease, a 2.2 percent drop. Homes in the South Denton County area, on average, sold for 1.8 percent less than during October through December last year.
The Park Cities area had the least inventory, a 7.2 months supply. The North Dallas area had the second lowest inventory with 10.5 months supply of homes for sale.
The Fort Worth / Arlington area had the highest inventory in December, with a 19.3 months supply of luxury homes for sale. The Southwest Collin / Southeast Denton Counties area, which had an 18.9 months supply of pre-owned luxury homes available for sale, had the next largest inventory.
Note to Market Watch Newsletter readers: Since I began writing this newsletter in the spring of 2006, the analysis provided in it has been based on monthly sales transactions reported though the first half of the subsequent month. Over the past year, however, I have noticed that more and more of these transactions are not being reported within this period. This has caused market conditions as initially reported to sometimes be materially incorrect. In an effort to provide both timely and accurate information to the reader of this newsletter, I have decided to wait about three weeks after the end of each month before building the transaction database that I use to analyze market conditions. Though this means the newsletter will be published about a week later than it has been until now, I trust that increased accuracy in my initial reports will justify this delay. |
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