Cash Buyers – Wherefore Art Thou?

The number of sales and new listings reported in Pelham during the month of June 2011 were both lower compared to June of last year.

According to the MLS® statistics of the Niagara Association of REALTORS® there were 15 sales compared to 25 last year representing a drop of 40% for the month. Year-to-date sales stand at 87 transactions – down 22% from the level of 112 units recorded during the first half of last year.

There were fewer new listings added to the local inventory with 42 single family homes placed on the market in June 2011 compared to 46 in June of 2010.  The year-to-date total of 249 new listings continues to run 8% above last year’s tally of 230 units.

Despite the low level of activity the average price in Pelham is soaring. The average sale price for single family homes in June was $397,833 – up from the monthly average of $353,586 reported in May. The 12 month average sale price has reached a record high of $333,290 representing a 3.6% increase from the June 2010 12 month average of $321,581.

It is important to not get distracted by this bubble of hyper price acceleration as the figure is skewed by two critical compositional factors.

During the month of June one of the highest local MLS sales figures to date – $1,250,000 was recorded, dramatically impacted the already smaller relative monthly sample size.

Furthermore, it is the higher end price ranges that generally appear to be performing better in our current market conditions. Of the 15 sales reported in June, 60% had sales prices in access of $300,000. In comparison, this same price category represented 50% of a much greater sample size in June 2011.

The lower activity in the more traditional ‘move up’ price ranges is leading to lengthening times on the market and a surplus in conditional offers. A cash buyer seems to have become somewhat of an endangered species and more than ever ‘cash is king’ in our local marketplace.

Categories: Real Estate Market Update

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