The real estate market is in a state of flux in Gwinnett County, GA.
Currently (as of 30 November, 2009) there are 5,867 single family homes listed in Gwinnett County.
- 3,064 priced under $200k
- 2,020 priced between $200k and $400k
- 426 from $400k to $600k
- 152 from $600k to $800k
- 59 from $800k to $1m
- 146 priced over $1m
While the sales numbers for November are still preliminary (it takes a while for all of the sales to be reported and recorded), there are some notable trends.
Under $200,000
I fully expect that when the final numbers are in that the 3 month average Absorption Rate will fall under 6 months. For 6 month average and 12 month average, the numbers will be right around 6 and right around 7 months of inventory. That means that in the under $200k price range, the market is fairly balanced. This has been the strongest segment of the market for the last few months and this is largely because of the recently extended First Time Home Buyer Tax Credit. I don’t know if this is going to continue into the new year and fully expect to see a slowing by the time it expires in June (contract by 30 April and closing by 30 June).
$200,000 to $400,000
This segment isn’t nearly as strong as the entry level segment. When we get the final numbers, I think the 3 month average will show about 11 months of inventory. Backing the averages up to 6 and 12 months, I think those inventory absorption rates will be just under 11 months and around 12 months of inventory. What it comes down to is that the entry level price segment is dominating the market, but there is still some activity here compared to earlier in the year. I don’t think that the expiration of the tax credit will affect this price level as much as the entry level, but I do expect to see a slowing next summer.
$400,000 to $600,000
Simply put, this segment is not seeing a recovery. The 3 month, 6 month and 12 month averages show absorption rates as over 30 months, about 18 months and just under 18 months. That also shows that this segment of the market is showing a definite deceleration. That means that sales are slowing. This is more of a deceleration in sales than we would normally expect to see from just seasonal variation. My expectation is that the economy is negatively impacting this price range, and the prices are high enough that a $6500 tax credit isn’t going to spur buyers into action.
$600,000 to $800,000
Not much different here than in the $400k to $600k range except that the market is absorbing the properties more slowly. Across the board (3, 6 and 12 month averages) show around 2½ years of inventory. The bright spot is that it isn’t getting worse.
$800,000 to $1,000,000
Things are ever so slightly better than the $600k to $800k range. It certainly isn’t strong, but is running around 28 to 30 months of inventory. However, unlike the lower range, it is decelerating slightly. It will be interesting to see the final numbers for November, as they will have a big impact… 1 or 2 sales makes a real difference here.
Over $1,000,000
The number of sales and listings can bounce around significantly at this range. In the last year there have been between 0 and 7 sales in a given month. Because of that, the 3 month average is kind of useless (it shows 87.6 months of inventory if we remain at 1 sale for November). For the 6 and 12 month averages, we indicate a 38 month and 42 month inventory level. Three to 3½ years of inventory is no picnic, but that has been the norm for the last couple of years at this level.
The Bottom Line…
The only real strength in the market is in the entry level price range. The farther up the scale we go, the uglier the picture is. If you are a luxury buyer, this is great news… If you are a luxury seller, not so much. The telling months are December, January, April and July. Since the first tax credits were slated to expire at the end of November, there was a rush to close by then. December will likely slack off, as will January. The next round of tax credits will push properties to close in the 2nd quarter of 2010, so those numbers as well as the July numbers will tell us if the recovery is “sticking” or just a burp.
Click here for an explanation of Absorption Rates.