The Reserves and The Woodlands At The Reserves Home Market Activity (RESERVES)
The one stat that just jumps off the page when I look at the data is the months supply of inventory (MSI) here in the RESERVES. My next observation is one everyone remotely keeping track of what is happening in real estate is; the impact of distressed sales on home pricing.
How to Escape from a Black Hole
MSI tells us how long it will take to sell the current inventory of homes that are for sale at the current rate of sales. The assumption is we will continue to sell as many this next 12 months as we did the past 12 months. A big assumption I will go into in another blog.
The MSI for our neighborhood is 24 months. To give some perspective, Plainfield’s MSI is 13 months. In the Reserves, currently 14 homes are for sale and this past twelve months, 7 homes sold. Giving us 2 years worth of inventory!
As for the distressed sales impact, keep an eye on 22604 Reserve Circle. This home was sold at the height of the “housing bubble” (June 2006) for a price of $406,000. I believe this is also the most ever paid for a home in the RESERVES. It is now a short sale at an asking price of $300,000. Doing the math this gives us over a 25% decline in value since the height of the market.
Instability
If I had to take an educated guess at where we are at currently, I would say we are at 2000 or 2001 pricing level. Many purchased their homes new from William Ryan during this time period. 22562 Reserve Circle was purchased in 2000 for $250,000 and just recently sold for $242,500. This was not a distressed sale and broke even for all practical purposes.
The home at 13960 Hunt Club was a total disaster for the bank. A foreclosure that back in 2000, was purchased by the owners in excess of $300,000. It sold for $207,000 or at least a loss of 30% from it’s 2000 value!
So if not a short sale and you purchased your home in early 2000s, you have the potential to break even if you sell today. Distressed sellers would see a 25% loss in value from this same time period. Single family housing has not fared as well as the townhomes. However remember this is only me reading the “tea leaves” of data and every real estate transaction is unique.
