Are we in a Buyer’s or Seller’s Market?… What if it’s not “either – or” and just a balanced market? From the comments:All in all, we are much closer to a buyers market than you think and it happened so fast because of the runup in housing prices over the past 2 years. It was simply unsustainable as low lending rates were not going to be around forever; and now wer are seeing effects of higher borrowing costs on buyers. If the fed raises again in June, and assuming we still have 8-12 months of trickling higher lending rates, expect a full blow buyers market (with all new dev inventory coming to market over next 1-2 years) by summer of 2007!While all real estate markets are decidedly local, the above could easily have been written with the CharlAlbemarle market in mind. Thanks to UrbanDigs for the comment.There is far more inventory now in our market than there has been for some time, Construction is Down, and prices are up. While my livelihood is based on the buying and selling of real estate, this is a cogent argument for renting in some occasions. Hat Tip to Inman for pointing out this story.Local data analysis coming soon …
Browsing Category Market statistics
Quick market update
31 new construction properties in Charlottesville/Albemarle have had price reductions since 1 May. (link will expire in 2 weeks) Price reductions for new construction has been unheard of in this market for the past several years. Changes are upon us.1136 properties are on the market in CharlAlbemarle. 341 have had price reductions since 1 January – 30%!
Market Update for March 2006
Followed closely by “expectations.”In the CharlAlbemarle area -Active in February 2005: 279Active in February 2006: 413% increase: 32.45%Contingent: 29.08%Pending: -23.73%Active in March 2005: 412Active in March 2006: 472% increase: 12.71%Contingent: 12.83%Pending – -123.20%There seems to be a fairly safe correlation between the % increase in Active and Contingent properties. The number of Pending properties causes some concern, if only because I am uncertain as to why the discrepancy exists. A likely cause is user data entry error.– For the entire Market Area –Active in March 2005: 646Active in March 2006: 770% increase: 16.10%Contingent: .31%Pending: -98.17%More properties on the market means that buyers are more selective of which property they intend to buy…. heretofore how much a Seller paid for their house and when has been mostly irrelevant with regards to fair market value…. Not to beat a dead horse, but Sellers are going to have to alter their expectations and their efforts to sell in order to achieve top dollar.Fair market value: What a ready, willing and able buyer is willing to spend on a property. All the numbers and statistics in the world will not change the fact that if a buyer feels a property is worth X$, then that property is worth X$ to that buyer.Caveat: The increase in numbers can be partially attributed to the large number of condo conversions. Official MLS numbers should be released shortly.Speaking in code: The Pending Home Sales Index,* based on contracts signed in February, slipped 0.8 percent to a level of 117.7 from an upwardly revised index of 118.6 in January, and is 5.2 percent below February 2005. January experienced a strong upward revision from a preliminarily reported index of 116.3 and was higher than the December reading of 117.6; additional data from the Northeast showed that region to be stronger than earlier believed.From NAR; thanks to Inman for the hat tip.For the previous month’s market update, go here.
Anecdotal evidence on the local market
This article in the Washington Times is but one example: The downturn in the housing market is deepening, with new home sales at a nine-year low, prices down for the fourth month in a row and mortgage applications at their lowest point in three years. …”We see construction diminishing somewhat and real estate prices flattening, not declining,” she said…. I received this email the other day from a reader who is renting in the area – Did you see this article in Yahoo news?… If there is a compelling reason to to buy rather than rent and you plan to be in the area more than a short period of time, (insert my usual caveats here – if you have good credit, are mentally ready for the responsibility of owning, etc.) then you should probably consider buying…. They have been conditioned to getting at least the asking price, that some are unable to see the forest for the trees. Take the past few days for example – I wrote four offers, all of which are fair offers, based on the recent sold comparable homes.1) Asking price: $285k…. Just because a Seller is asking for a certain price does not mean that is what the property is worth. That said, if a ready, willing and able buyer wants to pay full price, that property is worth full price.
Advertising is moving to the web. (and this is news?)
It’s no wonder that internet startups are poised to blow the doors off traditional real estate business models.
CharlAlbemarle market update
The market always slows in December-January-February. These numbers are … interesting. Using the MLS as my source, with my standard caveat that the MLS is not all-encompassing …Inventory for Charlottesville/Albemarle:Active in January 2005 – 229Active in January 2006 – 296% increase – 22.64%Contingent – 20% Pending – 24%Closings – 13%Active in February 2005 – 273Active in February 2006 – 372% increase – 26.61%For the entire Market Area:Active in January 2005 – 403Active in January 2006 – 516% increase – 21.90%Contingent – 20.21%Pending – 23.12%Closings – 32.61%What’s the difference between Contingent and Pending? Contingent indicates that a contingency remains, typically home inspection, financing, etc. Pending means that all contingencies have been met and both parties are merely waiting to close.More inventory, less homes going under contract, a sense of equilibrium in the market, even a shift to more of a buyers’ market is upon us. I remain confident that the increase in inventory is a sign of a healthier market, for two reasons – first, I think that if enough people say “the market is popping!” then we will witness a self-fulfilling prophecy act itself out.
Charlottesville’s 2005 market statistics
Read the whole thing with the caveat that the MLS no longer comprises all transactions, but certainly enough to come to accurate conclusions.A few highlights:The median sales price for the entire market area in 2005 was $255,000 which is $30,000 more than the previous year’s figure. …The inventory shortage that has plagued our area for the past few years saw great improvement during 2005. As of Early January, 2006, our database has 1,588 homes actively listed for sale. That is an increase of over 500 more homes on the market than this time last year. We can expect around 300 homes to be purchased in January. That means that there are roughly 5.3 homes available in the entire market area for each buyer. While this higher inventory will cause a minor slow down the pace of price increases, we are still 20-30% down in inventory compared to the mid-1990’s.The last time we were in a buyer’s market (according to my mother, Betty) was 10 years ago. Might we be on track for another one? The 30-year fixed rate mortgage rate in 1990 was 10.13; rate in 1995 was 7.93.