I’ve spent the morning working on Activity Reports for my listings – they’re a look at a very refined, specific price point for each listing, and shows what’s happened in the New River Valley market in that price point during the last month. One of the things I found interesting was just how different our market is right now. While the Activity Report looks at a very specific section of the market, I also wanted to know what real estate had been doing across the entire residential market … the numbers were surprising.
I said in March I thought the real estate market was staying pretty strong, and I’m revising that a bit because, as I’ve told the Sellers I’m working with, I think I made a glaring mistake. In March, I wrote:
What’s it tell us? Well, for starters, the New River Valley real estate market as a whole is still pretty strong. With list to sale percentages averaging roughly 97% over the last three years in what’s typically a slow time for real estate (the November through February time frame), home sellers have been able to maintain strong sales prices. Average sale prices, however, can be swayed by a multi-million dollar sale on the high-end, or an inexpensive sale on the low-end, and so median sales prices might be an even better barometer of strength in the market … In 2008, the median sales price for the first two months of the year was 95.6%. The following year it climbed to 96.9% during that same time period, and in 2010 the median sales price in Blacksburg, Christiansburg and Radford was 99.9% of the list price.
While buyers certainly have their choice of options available to them when it comes to housing in the New River Valley, the statistics are showing that, even in the slow times of the year, sellers are still getting their asking prices. Looking forward to seeing if that continues through the year.
One thing is certain – buyers still have their choice of options available to them, and if they’ve got 10% or more of the sales price (err on the side of more) and staying in the home for three years or more, I still think it’s a great time to buy. Where I went wrong in the first quarter of the year though, was in relying on numbers that were skewed by the First Time Buyer Credit – remember that thing? And I feel foolish for doing it, since we had just gone through a similar situation with the incentives that had been floating around encouraging people to buy cars. I wasn’t being realistic. Uncle Sam offered money for cars, and car sales picked up, then when the money was taken away … auto sales dried up. Then, the First-Time Buyer Credit was instituted, and home sales picked up … until May 1st, when there was a giant sucking sound as buyers left.
It’s true, despite what the trade organizations would have you believe. Don’t believe me? Look at the chart below, showing the number of residential real estate closings in the 24060 (Blacksburg), 24073 (Christiansburg), and 24141 (Radford) zip codes over the last four years:
That’s what’s happening in the real estate market right now. Over the last four years, we’ve seen a 66% drop in the number of closings during the month of August. Data for 2007 isn’t available, but if you look at the same zip codes and look at activity January 1 and August 31 you’ll see a similar picture:
While the drop isn’t as steep (35% between 2008 to 2010) when spread over twenty-four full months, it’s still significant.
It’s scary stuff, particularly for home sellers without much of an equity position in their homes (read money put down), and as I mentioned in each of my Activity Reports for August, only three things matter if you’re selling a home right now – Price, Condition, and the Patience to wait. Look, only in a unique situation is an agent going to sell your home in three days. Unemployment is still a major concern for many buyers, and without the confidence that their job is going to be there for the long-term, they’re not buying anything. If you’re selling a home, and an agent tells you it should sell quickly, perhaps you should reconsider whether that’s really realistic before moving forward. And buyers – I know you’re out there – if you have money to put down and you expect you’ll be in the New River Valley for three years or more, buy. Let me say that again … BUY! Values are going to hold steady (they’re within 1/2% of where they were last year), inventory levels will stay high, and sellers are going to be glad to see you walk through the door.
Am I cheerleading? Nope – my team’s not down 49-0 in the 4th quarter and 3:00 minutes left. Am I taking a realistic look at what’s really happening? I think so … and what’s happening is going to benefit those buyers and sellers who are also being realistic.