Closed single-family home sales in September were up 13% to 165 units from last year; however, sales in September 2024 were weak, down 12%. The number of homes sold priced at and above $400K was even from last year, with 54 closed sales, while homes priced below $400k increased by 22% with 111. Year-to-date, sales are still up 6%, but sales will pull back in the next two months, based on pending listings.
Home price appreciation continues to moderate, with the median price remaining unchanged from last year at $330,000, and the average price up 2% to $389,954. New construction homes saw prices increase 24% with a median price of $457,150. New construction prices have fluctuated in the first four months of the year, but during the past five months, new construction prices have risen substantially, with a median price increase of 14%.
Pending listings (homes under contract) were down 20% last month, indicating the next two months will probably show a decline in closed sales. In addition, the drop in pending sales increased active inventory by 21%, with 530 homes on the market. There haven’t been this many active listings on the market since 2019. New listings last month also increased by 9%, pushing the months of inventory to 3.21 months, up 7%. Although the overall market inventory level is still low, a market shift has occurred in homes priced above $450k, where the average inventory level is at 6.84. Sellers still have a market advantage for homes priced below $450K, but have more market competition, based on the number of homes on the market.
Increasing inventory has also extended the time it takes for a home to go under contract. Cumulative days on market last month hit 43 days, up 48% from last year.
Building permits in Columbia, Ashland, and Boone County were all up in September, but year-to-date, permits are down 15% from last year. Building permits could spike in the fourth quarter, depending on the direction the City of Columbia goes with adopting a new building code, primarily the energy portion of the code, which could add $15,000 to the cost of construction.
For the third quarter of this year, sold listings were up 7%, while the median price was up 2%. One interesting note for the third quarter is the growth of homes outside of Columbia. Sold homes with a Columbia mailing address increased 6% (homes in the city limits of Columbia increased 13%), but homes in other municipalities areas increased on average of 29% (a portion of the increase could be attributed to a growth in CBOR MLS membership, providing more listing data).
Condo sales in the third quarter were down 4% and are down 9% year-to-date. Prices on the other hand were up 7% last quarter. Condo sales continue to be hindered by the lack of first time home buyer financing, as there still are not any condo developments in Boone County that qualify for FHA financing.
The market seems to be at an inflection point, where the market starts to soften or picks back up in the fourth quarter. The significant drop in pending sales is concerning, even more so when the drop occurred in conjunction with falling mortgage rates. Mortgage rates aren’t far off from the low during the past 12 months, but consumers are still under the impression that rates are high. Consumers could also be waiting see if the Federal Reserve continues to lower the Fed Fund Rates, which could also potentially lower mortgage rates further. Last year, home sales during the third quarter dropped by 11%, but rebounded 9% in fourth quarter, also during a period of uncertainty with regards to mortgage rates and elections.
SOURCE – COLUMBIA BOARD OF REALTORS CEO, BRIAN TOOHEY, MBA, RCE, EPRO
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