Highland Lakes Area MLS Market Outlook 2011
As you hear in the press, many economists feel that the economy is improving. It appears that the Highland Lakes area real estate market is trending in a positive direction. For the first time since 2007 we have seen an increase in the total dollar volume of single family site built homes sold (chart 1), and a leveling off of the non-lakefront number of units sold (chart2). Providing the economy remains stable, I am anticipating that this means that we have reached the bottom of the market.
Chart 1
Chart 2
It is important to keep in mind that the Highland Lakes Area is a small and unique market, and a few large lakefront sales can skew the numbers substantially. I track the total market, non-lakefront, and lakefront markets; however, I feel that the non-waterfront market more clearly represents the trends in our area.
We have been fortunate to enjoy a fairly stable local economy in the Highland Lakes area, and even though the end of 2010 showed a housing supply of 20.70 months, sellers had enough confidence in our market and the financial ability to avoid substantially discounting their homes. Since 2005, the Highland Lakes Area has seen the total unit sales for single family site built homes (chart 2) decline by 48.31%, lakefront unit sales declined by 62.8%, and non-lakefront declined by 41.76%. During this same period the dollar volume of sales was only down by 25.16%. So, while unit sales are down, prices have held relatively firm. The seller’s confidence has helped to keep the average price per square foot (chart 3) on non-lakefront property at $97.05, a relatively low average depreciation rate of 2.68% per annum since 2007.
Long term, the following factors should provide for a stable and growing market in the Highland Lakes Area:
· Lake of the Hills Regional Medical Center – Construction of the clinic to commence in July 2011, anticipated completion by August 2012. Hospital construction to begin after that.
· Baby Boomers….2011 marks the year the first boomers start to turn 65.
· 13% projected area population growth over the next 10 years.
All figures are deemed to be reliable but not guaranteed.
Chart 3
Chart 4
Chart 5
Chart 6
It is my opion that the average and median sales price of single family site built homes increases in 2010 is due to the historically low interest rates, allowing buyers to purchase larger homes.
All figures are deemed to be reliable but not guaranteed.