August 21, 2008
Beating the Data Drum.
The Buyer Poll (see the post below) has affirmed the current low activity level in the local Lake Vermilion real estate market. The most popular response (perhaps predictably) was “When I find the right property at the right price”.
No one indicated they were buying later this year. Urgency is certainly not a word to describe Buyer attitudes.
The inventory of lake shore property is at very high levels for this time of year. (This large selection of cabins and lots is a by-product of this sluggish market that Buyers might factor into their buying plans.)
And when it comes to Seller pricing pressure, the local MLS System can provide us some idea of what has happened to lake shore selling prices. It may also be true that urgency is absent on the Seller’s side of the market.
This chart illustrates the trend:
“Amount of discount (in percent) allowed by Sellers from the asking price to the actual selling price”
The chart shows data over a four year period from today (August 2004-August 2008). These numbers reflect average price concessions by Sellers. Please note that there were certainly sales with deeper discounts, as well as sales, at or above asking price. (Of the approximately 250 sales included, the overall average concession for the previous 4 years was 7.1%.)
I believe the information would tell us that Sellers are, for the most part, holding firm. There is no large reduction in asking prices or selling prices.
It will be interesting to see if this trend continues. In the meantime, the selection of properties, in a market that typically does not offer a large selection, remains very high.