Wow – March 17th and I’m just getting around to doing the absorption rates for February. I wrote last month that Coldwell Banker Townside had its best year ever last year, as did the NRVLiving Real Estate Team as well. Very proud of that, but 2008 is a new year and I need to get on the ball …
Most of the markets we study here have seen improvements between January and February of this year (except for Floyd). It’s not uncommon to see this happen as we head into the spring, as more properties start to come on the market and more properties tend to sell. Nothing unusual there, and as I wrote about last week we’ll continue to see these markets balance out as we head into the spring and summer. 10.26 months worth of inventory on the market at this point, down from 18.73 months worth in January, so a marked improvement but still very much a buyer’s market. It’ll likely stay that way through much of the year – I know, I said last month I thought we might see that change in the middle of this year, but I’m revamping that a bit – as the dollar keeps falling, I just wonder how strong the rest of our economy can stay. There are a lot of really smart people out there debating this very thing, so I’ll leave the analyses to them, but that’s just my own perception of things. Remember, we’re looking at how long it would take to sell the existing
residential inventory in a particular area, if nothing else came on the
market until supply was exhausted. Anything over 5 months is typically
a buyers’ market, and anything less than 5 months is typically a
seller’s market.
| Area | Active | Sold | Absorption Rate | Buyer/Seller Market |
|---|---|---|---|---|
| Blacksburg | 226 | 29 | 7.79 Months | Buyer |
| Christiansburg | 278 | 31 | 8.97 Months | Buyer |
| Montgomery County | 74 | 8 | 9.25 Months | Buyer |
| Floyd County | 73 | 7 | 10.43 Months | Buyer |
| Giles County | 56 | 4 | 14 Months | Buyer |
| Pulaski | 104 | 8 | 13 Months | Buyer |
| Dublin | 102 | 10 | 10.2 Months | Buyer |
| Radford | 76 | 9 | 8.44 Months | Buyer |
From last month (and the month before that, and continuing for most of 2008):
My prediction (which is worth nothing but we’ll see whether or not it comes true) – 2008 will be strong for buyers as inventories will remain slightly inflated, and loan rates will remain stable. Sellers will need to focus more than ever on setting their home apart, and they can do that by having the home ready to sell, and by maintaining an honest perspective of their market position. If they’ll do that, they will benefit from a ready, willing and able pool of buyers.
It’s true, pricing is key for sellers and will be for some time. Market value is only what a buyer is willing to pay for a property, and nothing more. Case in point – I’m selling my own home for $176500, it closes tomorrow. My neighbor right next door, with the exact same floorplan, few upgrades and original fixtures, is selling his for $198500. Can he get it? I doubt it, but what I believe doesn’t matter – if a buyer is willing to pay $20000 more than my sale tomorrow, then market value just increased by more than 10% OVERNIGHT. I hope I didn’t leave money on the table, but if I did then good for him – he’s just made a lot of people in the neighborhood very wealthy!
Interest rates are still very low, and values in the New River Valley are stable … contact me here if you’d like to do a confidential analysis of your situation.