Tag Archives: absorption rate

How Many Homes Are For Sale in Blacksburg and Christiansburg?

As Realtors, we get asked a lot “what’s the market like right now?”. I was in Richmond last week, meeting with Virginia Senators and Delegates from our district, and every single one of them asked “how’s the market?”. It can seem disingenuous to always be saying that the real estate market is moving quickly, but as you can see from the graph below of single-family homes in Blacksburg and Christiansburg, as of this post the market is moving quickly. We’re not making this up.

(The graph is interactive, and therefore should update automatically over time; what it’s detailing is how many months worth of supply there is at any given point. If you hover your mouse over a particular point on the graph, you’ll see the exact data representation for that point of the graph.)

Find your own single-family home here.

As you look at this, what you’re seeing is that – since July 2016 – inventory levels in the NRVMLS (New River Valley Multiple Listing Service) have been falling. It took Blacksburg and Christiansburg a few more months to catch up, but beginning in September 2016 they also saw inventory levels starting to fall. In January 2017, inventory in the NRVMLS was at 6.3 months of inventory, in Blacksubrg it was 2.6 months, and in Christiansburg, 3.4 months. We call this the Absorption Rate – how long it would take the market to absorb the available inventory in the market. I’ve written about it before, and it’s something that we at Nest Realty watch pretty closely.

Why does Absorption Rate matter? Well, it gives us a sense of both where the market has been, and where it is now. The general line of thinking is that 6 months of inventory is a relatively balanced market, favoring neither buyers nor sellers – much like the New River Valley real estate market right now. Click Here to see more info. Anything greater than six months typically favors buyers because supply is exceeding demand, and anything less than six months favors sellers because demand is exceeding supply. That’s what we’re seeing in Blacksburg and Christiansburg.

So what’s that mean for buyers and sellers in Blacksburg and Christiansburg right now? It’s a familiar refrain, I’m afraid – sellers who are priced well and show well are going to be in the drivers’ seat for the foreseeable future, and buyers need to be ready and prepared (preapproved) to buy … there isn’t going to be much opportunity to wait and think about it.

Find your nest. It’s free. Truly.

YTD Real Estate Figures for Christiansburg VA

Six months of the year are behind us, and it’s a downhill race to the finish in 2010.  To say it’s been an interesting year in real estate is an understatement – there was the rush to get under contract for the buyer credit, and then we’ve seen a much slower-paced market since April 30th.  I posted the YTD real estate figures for Blacksburg last week; the Radford real estate numbers were posted earlier this week, and today’s it’s Christiansburg’s turn.  Following are the sales and inventory figures in Christiansburg for the first six months of 2010:

Christiansburg Inventory Levels and Average Sales Prices

< $200000 –                   9.6 months       $146556

$200001 – $300000 –   12.0 months     $240334

$300001 – $400000 –   6.48 months     $353180

$400001 – $500000 –   No Sales

$500001 – $600000 –   No Sales

$600001 – $700000 – No Sales

$700001+ – No Sales

These inventory levels are referencing what’s called the “absorption rate” – how long it would take the market to “absorb” the current inventory if nothing else came on the market.  In the New River Valley – and in most real estate markets, really – a balanced market is a figure of six months.  Anything less than six months is a sellers market, anything more than six months is a buyers market.  So by looking at how many homes are on the market in a particular price point, as well as looking at what’s sold over the last six or twelve months, we can get an idea of just how long it would take the market to absorb the current inventory levels.

A couple things jump out at me from the outset.  First, this is the closest that I can recall the 12-month average sold price between Blacksburg and Christiansburg being so close.  The $200000-300000 price point in both Towns is typically where the most number of listings can be found, and this is the first time I can remember the average sales price in Blackburg being so close to the average sales price in Christiansburg.  With nearly 42% more sales in Blacksburg (126) than in Christiansburg (74), I suspect this is indicative of those two markets become much more similar – and that’s a good thing, because it takes away some of the “can’t buy into the Blacksburg real estate market” that many buyers mention.  Second … no sales in the $400000 or higher price points?!  If I’m a homeowner in those price points in Christiansburg, I’m frustrated.

Price to sell.

YTD Real Estate Figures for Radford VA

Six months of the year are behind us, and it’s a downhill race to the finish in 2010.  To say it’s been an interesting year in real estate is an understatement – there was the rush to get under contract for the buyer credit, and then we’ve seen a much slower-paced market since April 30th.  I posted the YTD real estate figures for Blacksburg last week, and today it’s Radford’s turn.  Following are the sales and inventory figures in Radford for the first six months of 2010:

Radford Inventory Levels and Average Sales Prices

< $200000 –                   9.7 months       $122055

$200001 – $300000 –   28.0 months     $262443

$300001 – $400000 –   22.3 months      $355997

$400001 – $500000 –   36.0 months      $456000

$500001 – $600000 –   29.4 months      $545583

$600001 – $700000 – No sales

$700001+ – No sales

These inventory levels are referencing what’s called the “absorption rate” – how long it would take the market to “absorb” the current inventory if nothing else came on the market.  In the New River Valley – and in most real estate markets, really – a balanced market is a figure of six months.  Anything less than six months is a sellers market, anything more than six months is a buyers market.  So by looking at how many homes are on the market in a particular price point, as well as looking at what’s sold over the last six or twelve months, we can get an idea of just how long it would take the market to absorb the current inventory levels.

Radford is typically a slower market than many others in the New River Valley.  Don’t get me wrong – inventory levels are high in Radford, but they are high just about everywhere else, as well.  In Radford in particular, it’s a balance between what’s the lowest you’ll take for your home vs. the patience to wait in what is obviously a much slower real estate market.  Price your home to sell, and make sure it looks better than everything else.

YTD Real Estate Figures for Blacksburg VA

I’ve been spending the last couple of days digging into the real estate numbers for the New River Valley, and I thought I’d share some of the figures I’m finding so far.  This post deals with sales and inventory figures in Blacksburg for the first six months of 2010, while subsequent posts will deal with market statistics for Christiansburg and Radford during the same time period.

Blacksburg Inventory Levels and Average Sales Prices

< $200000 –                   8.53 months     $143398

$200001 – $300000 – 7.51 months     $247136

$300001 – $400000 – 10.9 months     $345830

$400001 – $500000 – 17.4 months     $435668

$500001 – $600000 – 12.0 months     $545583

$600001 – $700000 – No sales

$700001+ – 20.0 months        $803166

Whenever I look at inventory levels, I’m looking specifically at the “absorption rate” – how long it would take the market to “absorb” the current inventory if nothing else came on the market.  In the New River Valley – and in most real estate markets, really – a balanced market is a figure of six months.  Anything less than six months is a sellers market, anything more than six months is a buyers market.  So by looking at how many homes are on the market in a particular price point, as well as looking at what’s sold over the last six or twelve months, we can get an idea of just how long it would take the market to absorb the current inventory levels.

In Blacksburg, real estate inventories are high.  There are a lot of properties on the market, and not many coming off, and while as a home seller that may seem like a bad thing, it isn’t necessarily so.  Every seller I’m working with is getting the same message – Price your home to sell, and make sure it looks better than everything else.  The buyers that are out there will take notice …

The State of the Market – November 2008

Candy Shop
Ever been in a candy shop?  You know, the type where there are candies of all sizes, shapes and colors lining the walls?  The shops where you shove a big metal shovel the size of Delaware into a barrel of assorted candies, and you come up with all different types of sweets?

Yea – that’s what the real estate market is like right now.

It’s not that it’s a huge surprise … the winter is always slower than normal, so we were prepared for that.  I can’t say anyone saw bailouts of the banks, the construction folks, the auto makers, the pizza bakers and the professional matchmakers, but needless to say here we are.
Eminem
See how I did that, the whole rhyming thing and all?  I know – Eminem I’m not.
Nor am I fan of bailouts of irresponsible mismanagement, but that’s a story for another day.

Buyers, if you:  (1) have a job, (2) have money to put down and (3) have good – notice I didn’t say excellent – credit, our current real estate market will be like walking into that candy shop and taking your pick of everything that’s available.  I don’t mean that you’ll get it for pennies on the dollar, but the opportunities are there to pick up excellent values right now.  Think about it – if a property is listed now, between the Thanksgiving and Christmas time frame, don’t you think that Seller is serious about selling his or her home NOW?  I do, and my Sellers are.  And it’s important to note that when I say you need money to put down I don’t mean ten’s of thousands of dollars.  There are lenders here locally, right now, offering great rates on FHA and other buyer programs that are requiring as little as 3% down, not to mention the free money – yes, free money, not additional loans – that localities like Blacksburg are offering qualified buyers.

Let me post the latest absorption rate numbers for the New River Valley market now, and then check in with folks that might need to sell their home in the next few months.  When it comes to absorption rates, 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.

Graph

Area # of Active Properties # of Sold Properties
Absorption Rate
Buyer/Seller Market
Blacksburg 211 12 17.58 Months Buyer
Christiansburg 258 13 19.85 Months Buyer
Montgomery County 64 0 64.00 Months Buyer
Floyd County 115 4 28.75 Months Buyer
Giles County 54 1 54.00 Months Buyer
Pulaski 101 5 20.20 Months Buyer
Dublin 107 4 26.75 Months Buyer
Radford 70 3 23.33 Months Buyer

Sellers, the market’s not in your favor now when you look at the numbers above.  28, 54, 64 months worth of inventory?  An average of more than two years worth of inventory is a scary thing when you’re putting your home on the market, but remember it’s not taking EVERYTHING that long.  The average for the NRVLiving Team in 2008 is 101 days, or just over 3 months.  Some have taken less, some will take more, but we’re doing our best to expose our listings in every effective way possible.  That being said … selling right now isn’t for everyone.  If you bought a townhouse in Christiansburg last year for no money down and expect a 10% return, it might be a good idea to rent for the home for a while.  Those are products that are having difficulty selling in today’s market, and will need some time to settle out.  Nevertheless, there ARE ways to get it sold … not the least of which includes patience.  There is a lot of uncertainty right now, and it’s going to take patience and carefully executed marketing to reach buyers who are ready to execute.

At the halfway point of the year, I wrote a post looking at what the market was doing up to that point, and compared it to the year prior.  The results were striking, and I’m working on a follow-up for the entire 2008 year that I hope will be helpful.  There will be some in the real estate market who will be happy they held off selling, and others that will regret not buying, but the time is not right for everyone.  Be patient, find an agent who is studying and demonstrating they know the market they’re serving, and grab that shovel – there’s candy to be had.

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The State of the Market – September 2008 (Renamed: A Slow And Steady Approach)

August has come and gone, and September has as well.  The leaves are changing … it's one of my favoritest (can I say that?  Sure I can) times of the year here in the New River Valley.  September has NOT been nice to the stock market, however – there's no secret there, we've passed a bill with economic implications that are really beyond comprehension to try and stabilize it, and oh yea, there's a presidential election going on as well.  Wondering how it all effects housing?  My best guesses here, here, here and here.  As I said last month however:

"a slow, steady and calculated approach
to the market is going to be important as we move forward towards 2009."

I believe that, more than ever.  If you look at the first half of the year you'll see prices being soft during a time of year that's typically a much stronger market, and then as we've gotten further into the fall that trend has continued.  According to figures pulled from the New River Valley MLS, volume across the entire New River Valley (which my absorption rate statistics does not cover in its' entirety) is down about 14% from this time last year, the average sold price is down about 11% from this time last year, but the list to sale ratio is 96.3% (compared to 96.2% last year).  That tells me that while prices are down from this time last year, sellers are pushing for lower list prices as well – this is a good strategy.  In a market that's soft, don't rely on the price your neighbor got six months ago.  Stay ahead of the knife and price it right the first time.  One more cautionary tale is for best knife sharpener, and I mentioned it last month … if you are in an Adjustable Rate Mortgage, and your rate adjusts or expires at anytime in 2009, please contact me immediately.  There are serious implications for many homeowners who will find their payments jumping by hundreds of dollars a month, let's find a local lender who can act quickly to help you refinance and keep your payments low.

When it comes to absorption rates, 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.
Graph

Area # of Active Properties   # of Sold Properties
  Absorption Rate 
  Buyer/Seller Market 
Blacksburg 206 19 10.84 Months Buyer
Christiansburg 272 17 16.00 Months Buyer
Montgomery County 68 8 8.50 Months Buyer
Floyd County 127 2 63.50 Months Buyer
Giles County 60 8 7.50 Months Buyer
Pulaski 101 5 20.20 Months Buyer
Dublin 116 7 16.57 Months Buyer
Radford 79 7 11.29 Months Buyer

A full and complete shift into a buyers' market through September, which again is no surprise, it's part of the cycle.  Certainly, news from Wall Street and an election are playing into this, as well as just the typical slow down that happens every year about this time.  I was asked on Monday if I was worried about my job.  Let me be clear … NO.  People are going to buy and sell during turbulent times.  The market will be different, it will be rocky at times, but if I know how to navigate it and put the pieces in place, it all works out in the end.  Let me repeat – a slow, steady and calculated approach
to the market is going to be important as we move forward towards 2009.

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The State of the Market – August 2008

It's the home stretch for 2008, and what a year it's been so far – the first half of the year showed that the time to sell a home was actually FALLING a bit, but prices were unchanged for the most part save for a few select areas.  As we head further into fall and winter, I expect we'll see shifts across all area markets to what we'd consider a buyers' market.  There are also many Adjustable Rate Mortgages expected to reset in early 2009 and so I'm wondering if we may see more homes coming on the markets in the next couple of months, as homeowners try to avoid rising mortgage payments.  If you're one of those homeowners and aren't intending to move, please contact me immediately – let's find a local lender who can act quickly to help you refinance and keep your payments low.

When it comes to absorption rates, 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.
Graph

Area # of Active Properties   # of Sold Properties
  Absorption Rate 
  Buyer/Seller Market 
Blacksburg 208 35 5.94 Months Buyer and Seller
Christiansburg 276 41 6.73 Months Buyer
Montgomery County 69 11 6.27 Months Buyer
Floyd County 123 6 20.50 Months Buyer
Giles County 60 4 15.00 Months Buyer
Pulaski 108 13 8.31 Months Buyer
Dublin 123 14 8.79 Months Buyer
Radford 92 12 7.67 Months Buyer

This shift into a buyers' market is certainly nothing new, it usually happens every year.  Interesting days ahead though, a slow, steady and calculated approach to the market is going to be important as we move forward towards 2009.

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The State of the Market – June 2008

The residential properties sold in the month of June here in the New River Valley have been closed out in MLS, and the new numbers are in (thank you, Aaron, for compiling them).  Since we now have two complete quarters in the book, we’ll first post the numbers for this month, then dig a little deeper into reports for the entire year. 

When it comes to absorption rates, 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.
Graph

Area Active    Sold      Absorption Rate    Buyer/Seller Market 
Blacksburg 235 62 3.79 Months Seller
Christiansburg 276 54 5.11 Months Balanced
Montgomery County 68 7 9.71 Months Buyer
Floyd County 109 9 12.11 Months Buyer
Giles County 96 9 10.67 Months Buyer
Pulaski 102 14 7.29 Months Buyer
Dublin 120 22 5.45 Months Balanced – Buyer
Radford 109 13 8.38 Months Buyer

Why does the absorption rate matter?  It’s supply and demand, really.  What’s the supply in a particular area of the New River Valley, and what’s the corresponding demand for that supply?  Over the last several months, absorption rates have stayed relatively high, indicating a shift toward longer selling times, and a buyer’s market.  There are fluctuations within each area – because of particular products available, creation or elimination of jobs, or school schedules, for instance – but on average the markets for 2008 have remained firmly in the buyers’ favor.

A reader emailed me after last month’s post and asked why I wasn’t using more of the MLS data in each months report.  More MLS data would include things like price changes, days on market, etc., and the absorption rate is a quick snapshot of the market average.  Given that we’ve now got two quarters behind us for the year, I thought I’d do a comparison of the market through the first two quarters of 2008, and compare it to the same time period of 2007, in the eight areas listed above (Dublin has been lumped into Pulaski, for this table).

Area  2007 DOM   2008 DOM 
 2007 Avg Sales Price   2008 Avg Sales Price 
Blacksburg 111 94 $227,768 $240,515
Christiansburg 129 110 $187,649 $184,151
Montgomery County 144 118 $284,350 $254,777
Floyd County 178 129 $185,152 $181,515
Giles County 161 138 $131,986 $114,707
Pulaski 146 119 $154,155 $153,139
Dublin —– —– —– —–
Radford 140 120 $155,024 $154,932

It’s an interesting look at the market, I think … YTD in 2007 vs. 2008, the Days On Market has gone down in every single area, yet prices have fallen in every market (on average almost 5%) but Blacksburg (which has gone UP 5%).  Safe to say the market here has shifted to the south side of stable during the first quarter of 2008.  Nevertheless, homes are still selling.  I had this conversation with another agent and her client at a closing we had this morning – if the home is priced well, shows well, and is exposed to the market, we WILL get it sold.  

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The State Of The Market – April 2008

Continuing the theme from last month, movement in individual segments of the market but really no change in the market overall – despite MAJOR slowdowns in Dublin and Radford.  March moved 133 properties to closing, while April increased that number to 141 properties that closed, yet overall the market stayed almost dead even with the previous month – 11.61 months of inventory, very much a buyer’s market right now.  The numbers bear out what we are feeling on the street right now … increases in market time has led to numbers of homes for sale increasing, with very little improvement overall across the entire sector.  Something to keep an eye on.  Again, 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.
Graph

Area Active    Sold      Absorption Rate    Buyer/Seller Market 
Blacksburg 247 26 9.5 Months Buyer
Christiansburg 314 40 7.85 Months Buyer
Montgomery County 79 8 9.8 Months Buyer
Floyd County 86 10 8.6 Months Buyer
Giles County 56 11 5.09 Months Balanced
Pulaski 114 15 7.6 Months Buyer
Dublin 120 7 17.14 Months Buyer
Radford 109 4 27.25 Months Buyer

This month, I wanted to dig into the story a little bit more and see how the market was doing versus last year at this time, so I’ve compared home sales and average sales prices in April 2007 and April 2008, as well as home sales and average sales prices YTD in 2007 and 2008.  The results were surprising …

Apr 08 Sales April 07 Sales   Change  2008 YTD 2007 YTD   Change   
Home Sales       141        176    – 20%      514       560     – 8%
Average Sales Price    $193042     $187450    + 3%   $185215   $188664     – 2%

While interest rates are still very low, values in the New River Valley have fallen slightly since last year at this time, while they ROSE in April.  I was expecting that they would have risen by 2% or so for the year, not fallen by 2%.  Still, I’m confident that there’s not a slippery slope in the market here, although I’m no economist by any means. 

This doesn’t mean that there’s a bubble waiting to burst here in the New River Valley.  I think the larger picture here is that the New River Valley is seeing those pockets – Blacksburg condos, Christiansburg townhomes, for instance – starting to adjust to normal levels.  Once the market has balanced out, we’ll see positive growth again … and I think we’ll see that sooner than later!

 

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