For today’s look at the Old Northeast market activity over the last five years plus 2013 year-to-date, we’re focusing on the quadrant that most people consider the “true” Old Northeast – from 1st Street east to Beach Drive NE, and from 5th Avenue N north to 22nd Avenue N. It has the largest number of homes in our analysis. We’ve purposely left out the North Shore area east of Beach Drive because it has a completely different dynamic. Now, to be sure, some folks will say that the character of the neighborhood changes south of 12th or 13th Avenue, but there has to be a limit to how much we slice and dice the data!
Just like the rest of the neighborhood, it’s clear that 2011 was the turning point for recovery. Average sale price hit bottom at $365,148, average price per square foot ($/sq ft) hit a low of $165, and from then on, both of those figures have increased continually. For the current year-to-date, average sale price is up to $531,437, and $/sq ft is at $230, both figures being higher than 2008.
Total number of sales spiked in 2012, an indication of the recovery as buyers burned through the inventory. Sales for 2013 are on a healthy pace, already 84% of last year’s total and only 7 full months into the year. Much like the rest of the neighborhood, average days on market has fallen, from a high in 2010 of 247 days, to the current 101 days. This is reflective of the low inventory and high demand (there’s currently only a 2 month supply of homes in this quadrant). Interestingly, though, the segment with the fastest time to contract in the last 19 months has been those homes priced between $800,000 and $1,000,000, at 96 days on the market.
Buyers using financing have remained in the majority since 2008, currently representing 63% of the sales closed so far in 2013. Cash buyers were most active in 2011 and 2012, but currently comprising only 37% of the purchases year-to-date. In every segment of the market except the lowest-priced homes (those under $250,000), the majority of buyers have utilized financing – perhaps taking advantage of the low interest rates to best leverage their portfolios. As a matter of fact, the two sales over $1,000,000 in the last 19 months have both utilized financing of some sort!
As an aside, our friend Nathan Lindley at Envoy Mortgage provided us with some interesting fodder about interest rates over the last several years. He shared that the current 2013 rate of 4.5% equals $506.69 per $100,000 borrowed. In 2008, the average rate of 6.0% equaled $599.55 per $100,000 borrowed, or 18.33% more expensive than currently! So if you had any question about whether rising interest rates would impact home purchases, there it is in black and white.
So that’s today’s look at the Old Northeast. Still up for the remainder of the week are the two remaining quadrants – the oft-forgotten area from 1st Street west to 4th Street N, from 22nd Avenue north to 30th Avenue, and then the area known as Historic Granada Terrace, from 1st Street east to Coffee Pot Bayou, and from 22nd Avenue north to 30th Avenue N. On Friday, we’ll do some wrap-up analyses, particularly focusing on the different price points in the neighborhood as a whole. As always, if you have questions or would like more information, please contact us!