We know the residential real estate market in Bullhead City has been showing consistent signs of recovery for quite awhile now. Thanks to a strong finish in 2009 Inventory is down, sales are up, and we’re down to a 10 month supply – less than half the supply we had a year and a half ago.
Okay, that seems worth repeating.
The supply of homes for sale in Bullhead City has been halved in less than 18 months.
“10 month supply” means it will take 10 months to deplete the existing inventory based on the current rate of sales. Low supply favors sellers, high supply favors buyers. A balanced market – one that doesn’t favor buyers or sellers – has a six month supply.
But that’s not the big news.
Bullhead City’s micro markets
Within any market, there are micro markets that behave and perform differently than other segments in that market. These micro markets can be neighborhoods, price ranges, property types, and so on.
Even though the overall residential market has improved dramatically, it has “felt” much busier than the numbers reflect since November. So I set out to identify those micro markets that are out-performing the rest of the market. The result surprised me – and I track the market religiously.
Finding the sweet spot in the Bullhead City market
The residential market consists of three property types: Site built homes (houses), manufactured homes (mobile homes), and condos.
Bullhead City had 707 homes on the market at the start of this week. Site built homes accounted for 45% of those homes, manufactured homes 48%, and condos 17%.
Remember that when we lump those property types into a single “residential” group, we have a 10 month supply. Now take a look at them separately.
Things look a little a whole lot different when we look at the residential market in segments.
Site built homes are sitting at 6.4 months supply based on the rate of sales over the last six months. Less than a year ago (1st quarter 2009) the same segment of the market was at 21.6 months supply. Surprise!
So what’s the deal with Manufactured Homes?
To understand why site built homes are moving so much faster than manufactured homes, I see three factors:
- Pressure from site built homes – When the price gap between site built homes and manufactured homes got small enough, people jumped the gap.
- Mortgage Meltdown – (Ugh. Sounds so cliche) When financing programs began to evaporate, manufactured homes were hit very hard. It’s still possible to get financing for manufactured homes, but it’s not nearly as available as it was even a year ago.
- Banks not interested in owning manufactured homes – Lower prices have freed up our stalled inventory, driven by banks disposing of their foreclosed homes. But a very small percentage of the manufactured homes on the market are bank-owned foreclosures – less than 6% compared to 16% for site built homes (houses):
What you need to know
By segmenting the Bullhead City real estate market into micro markets, we can clearly see that the answer to “how’s the market?” varies greatly depending on what market you’re talking about.
Buyers that have been on the fence waiting for the market to bottom, take note of the balanced supply of site built homes. The 21.5 month supply, buyer’s market of 2008 has been whittled down to 6.4 months.
The trifecta of low prices, low interest rates, and supply of homes will not last forever – neither will the $8,000 home buyer tax credit scheduled to evaporate at the end of April.
If you’re looking for a sign in regards to price, I’ll close with this:
Supply drives price, right? Six months ago there were 89 houses under $100,000 available in Bullhead City. AS of this writing there are 54.
For the latest see: Bullhead City houses under $100,000
Data: Western Arizona REALTOR® Data Exchange.
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