Weekly Scorecard 2-28-11
The inventories continue to hold steady at very low levels or in the case of East Bellevue they have dropped to 160 homes. This is a number not seen in years. Also the sales pace remains steady. There is a new trend developing which the present numbers do not show. There is more new construction being sold. However this is not distressed bank inventory, most of that has been cleaned out. What is noteworthy is that these are new homes being built. However there is a catch. Many of these homes are coming thorough a “presale” listings meaning they are being sold off of plans and are not being built until an order has been received. This is the way of the future. There is too much risk and the cost of capital is too high to build homes in Bellevue on a speculative basis. It looks like a new cycle has started where buyers are willing to wait and have a home built as opposed to dealing with the existing inventory. This inventory continues to degrade and is progessively becoming older and in need of extensive updating and repairs. To get rid of this inventory will force prices down since buyers need huge premiums to take on these projects. As this inventory sells it will push down the averages overall but this also appears to be the final stages of cleaning up the inventory in this market as the sellers eventually “capitulate” and cut the prices enough to get rid of it.
The spreadsheet is here: Weekly scorecard 2-28-11