May Review (Prelim)

Preliminary numbers indicate 1126 new contracts for May 2011 versus 726 for May 0f 2010. This represents a 55% increase in sales over last year. The primary difference was the tax credit that pulled sales forward last year.

This is consistent with the leveling and stabilizing of the market, that I have been discussing this year. The year to date contracts are virtually identical for the first five months of 2011 versus 2010. And generally reflect a more normal seasonal curve rather than the tax credit distorted curve of the previous 2 years.

There are 2 areas of concern. First, an 8% decrease in average price per square foot that is probably caused more by the fact that we are selling an older home on average. Second, flat or fewer (will take several days to get all new contracts in MLS) new contracts for May versus April. Historically, new contracts accelerate through May reflected in fewer closings as the summer goes on. This would seem to indicate that sales slowed slightly ahead of schedule.

I’ll update in a few days when the information in the MLS is more complete.

April Market Update

Pending Sales & Sales Success
In this market segment, Pending Sales for April are down by 23.36% to 1,165 versus April of last year at 1,520 that went under contract.

With 2,176 newly listed homes this month and 1,165 under contract, the sales success index of 53.54% for April decreased 0.74% versus last year’s index of 53.94% in 2010.

Average Prices
According to the April 2011 statistics, this market area has experienced some downward momentum with the decline of average prices at closing. Prices dipped 4.13% to $221,490 versus the previous year April at $231,022. This is a difference in price of $9,532.

New Listings & Months Supply of Inventory

New Listing in this area for the month of April yielded 2,176 available resale dwellings. This was a decline of 22.78% or 642 units in comparison to April 2010.

The total housing inventory at the end of April dipped by 14.56% to 7,634 existing homes available for sale. At an average of 791 closed sales per month over the last 12 months (May 2010 - April 2011), represented an unsold inventory index of 9.66 MSI for this market segment.
Reports produced and compiled by R E S T A T S I n c

The months supply of inventory is illustrative for planning purposes, but the current demand as ilustrated by new contracts above gives us just over a 6.5 month supply of inventory. this is a further indication that we are returning to a more normalized market.

March Market Update

Months Supply of Inventory (MSI) Decreases
New Listing in this area for the month of March yielded 2,288 available resale dwellings. This was a decline of 19.29% or 547 units in comparison to March 2010. 


The total housing inventory at the end of March dipped by 12.19% to 7,645 existing homes available for sale. At an average of 813 closed sales per month over the last 12 months (April 2010 - March 2011), represented an unsold inventory index of 9.40 MSI for this market segment.

Average Prices
According to the preliminary trends, this market area has experienced some downward momentum with the decline of Average Price this month. Prices dipped 4.60% in March 2011 to $197,786 versus the previous year at $207,327.



Sales Success for March 2011 is Positive
In this market segment, Pending Sales for March are down by 8.70% to 1,092 versus March of last year at 1,196 that went under contract. With 2,288 newly listed homes this month and 1,092 under contract, the sales success index of 47.73% for March advanced 13.13% versus last year’s index of 42.19% in 2010.Reports produced and compiled by R E S T A T S I n c.




Bottom of the Market?
Continued volatility, with some trends up and others down is consistent with being at or near the market bottom. The decrease in the number of homes sold was expected as the prior year had sales pulled into the period in order to take advntage of the tax credit.

Overall sales were up for the first quarter and if flat or up in the second quarter may finally be signalling that we have been to the bottom.

February Market Update

Pending Sales & Sales Success
In the Central Virginia Multiple Listing Service, Pending Sales for February are up by 20.73% to 1,124 versus February of last year at 931 that went under contract. With 2,640 newly listed homes this month and 1,124 under contract, the sales success index of 42.58% for February advanced 27.54% versus last year’s index of 33.38% in 2010.

Average Prices
According to the February 2011 statistics, our market area has experienced some downward momentum with the decline of average prices at closing. Prices dipped 16.70% to $178,686 versus the previous year February at $214,496. This is a difference in price of $35,810.
 
Cautionary Note: This does not mean that the value of an average home went down. It is an indication that there are more buyers for lower priced homes.

New Listings & Months Supply of Inventory
New Listings in this area for the month of February yielded 2,640 available resale dwellings. This was a decline of 5.34% or 149 units in comparison to February 2010. The total housing inventory at the end of February dipped by 9.67% to 11,846 existing homes available for sale. At an average of 1,047 closed sales per month over the last 12 months (March 2010 - February 2011), represented an unsold inventory index of 11.32 Month Supply of Inventory for Central Virginia.

Bottom of the Market

Volatility is the norm for the bottom or top of the market. It is hard for prices and demand to reflect immediately on each other but we are seeing stronger demand and if it continues prices will go up. Reports of multiple offers are occurring more frequently. The only way to know for sure whether this is the bottom is to look back a year or two from now. At that time we will be saying; "I hit the bottom just right" or "I wish I had bought my house earlier and gotten more for my money."

Data Compiled From Central Virginia Regional MLS by RE Stats. on March 3 2011.

Week 5 Real Estate and relate news round-up

The Census Bureau Speaks: What's going on with homeownership and vacancy

The Census Bureau released its quarterly report on residential vacancies and homeownership on January 31, 2011. The homeownership rate dropped .4% to 66.5%, its lowest level since 1998. 

Home Buyers Kick Tires on a Rocky Road

Still, the traffic online, where I imagine most folks go before even heading to an open house, is an important sign, as we head into the Spring market. 

Or maybe they’re not just kicking tires.

From this blog, yesterday: The 743 new contracts represents an increase of 4.8% over last year. 

10 foreclosure hotspots

Las Vegas always wins the title for worst foreclosure rate in the country. But these 10 unexpected cities have the fastest-growing rates out of the 100 worst-hit places.

Here Comes the Sunbelt

In a little bit of a contrarian view to whats happening.

"Eighty million baby boomers are about to retire," went the argument. "They're not going to hang around in places like Chicago, New York, Boston and Pittsburgh all winter if they can help it.

Eliminating Mortgage Interest Deduction Would Raise Taxes for Middle-Class Families

liminating the deductions for mortgage interest and real estate taxes would raise taxes disproportionately for middle-class households and make the tax system less progressive, according to a new study from the National Association of Home Builders (NAHB).

January contracts up over last year

The Richmond area saw an increase of 34 new contracts for single family homes in January of 2011 over 2010. The 743 new contracts represents an increase of 4.8% over last year.

Though there are details concerning pricing that we will not know until after they close, the average size of the homes appears to be approximately 100 square feet larger.

The price they were listed for is only $1,300 more than the closed sales from last year. Based on our list to sales price ratio, I would expect to see about a 3 - 3.5% decline in average prices. I expect the average price per square foot to come in about 4.5% less than for the same period last year.

What does this mixed bag of info mean? Maybe nothing. What I suspect is that the prices have caught up with (lower) demand, and we may be seeing what the bottom of the market looks like.

I would love to hear your thoughts.

Housing links for January 29

A  sampling of the articles that I read this week that pertain to homes in our area:

Locally we found that the value of real estate has gone down 3.3% in Chesterfield and 1.13%  in Henrico according to reports in the Richmond Times Dispatch. Of course, they have been observing and working on those assessments for the year.

More positive local news came when it was reported that December unemployment was unchanged for Virginia. Richmond International is seeing increased traffic and 5 hotels received high honors from AAA.

One of the most encouraging pieces of data came from the commercial real estate sector. For housing to stabilize and our economy to improve, we will need an increase in jobs. We know that employers are announcing hiring to come, well they are also renting more space. This is also reflected nationally and the results are a growing GDP.

A new survey indicates that renters and owners agree that owning a home is still a smart decision. Meanwhile another survey indicates that affordability was a primary reason for buying a home in 2010.

Finally we have a brief guide comparing some home maintenance costs versus repair costs.

A tale of 3 foreclosed houses

When will the banks get a clue?

This past week had me working with 3 buyers on purchases. In all 3 cases the houses were for sale by a bank.

House 1 Had been priced at $79,900 and recently reduced to $49,900. The house was in a state of extreme disrepair. Inside sheet rock had been destroyed and floors were disintegrating. There was an area that used to have kitchen appliances and cabinets, but they were gone now. areas of the ceiling were coming down and the floors were rolling. My client crawled under the house and counted 23 joists that would need to be replaced. In other words the house needs to come down, even though it was not that old.

The MLS for this house had a comment that it was a nice lot. Not sure why it was a nice lot. Not overly large, or small, but definitely overgrown. The overgrown weeds and bushes did serve to hide the railroad tracks that adjoined the property.

Conclusion $25,000 lot with a $30,000 demolition job, makes this $49,900 house approximately $55,000 overpriced.

House 2 was on the market for $79,900 in a very popular area. The house was definitely dated. but had a brick and vinyl exterior and floors and walls were all sound. The average to large flat yard was entirely fenced in the rear. All interior surfaces would need to be redone, and the kitchen and baths would need to be updated. Add in replacement windows, a little landscaping and the investment to make this house desirable, would be around $25,000. 

This house was on the market for 2 days and garnered 10 or more offers resulting in a contract for more than list price and closing quickly because it is all cash.

More than likely the house will be renovated and placed back on the market for around a reasonable $170,000.

House 3 I already had under contract. My buyer had identified the house and neighborhood and it turned out to be on the market for $79,500. The house seemed to be appropriately priced, not a bargain and appraised for $82,000. The bank did not respond to the offer in a timely manner and then as a result of an even slower delivery by their agent to me and the purchaser was not really under contract until this past week. 

What was remarkable in this instance, is that while there are apparently 11 similar homes on the market in the area of this sale, only 2 have gone under contract since we made this offer at the end of October. In spite of this, the bank’s asset manager was constantly wanting to “kill” the deal. He couldn’t sell the house for any more than my client was paying. He couldn’t sell it any sooner, and yet he wants to “kill” the deal because it is closing late because his company returned the “contract” late and delayed the mortgage process.

I wish I could say these are isolated instances but they seem to be happening more frequently. So whether they are overpriced, underpriced or trying to kill a legitimate deal in a competitive market the banks don’t appear to be helping their investors, customers or vendors.