Taking stock of where the real estate market has been and where it’s headed…
In meeting with seller clients, I find it helpful to start any conversation about the value of their property within a framework of “where the market is today.” I pull certain statistics, and we discuss both the macro level (our entire market) as well as the micro (usually their zip code). It’s helpful for me to keep tabs on various market segments, and I think sellers find it instructive to know what to expect going forward.
When asked how the market is, it’s easy to say, “Oh things are moving fast…”—but it’s a whole different thing to have some facts and figures to back that up. As of press time, we have data available for the first two months of the year, so we’ll focus on the numbers for January and February. During the first two months of 2017, we saw 653 residential properties come on the market. Remember, these are some of the slowest months of the real estate year.
In the same time period of 2016, there were 616 listings put on the market, which means this year we’ve seen a little bit of a bump. In 2015, during the first two months, there were 693 new listings; in 2014 there were 713; in 2013 there were 703; in 2012 the number was 686 and back to 2011, there were 732 properties put on the market in the first two months. This shows that last year was the lowest point in terms of new listings in the past eight years, and this year ranks second lowest.
Okay, so we’ve established a general downward trend in terms of new available properties for sale. What about properties that have sold in those first two months? Keep in mind, these sold properties are generally a reflection of contracts signed in the last month or so of the prior year—meaning, people who wrote or accepted offers from Thanksgiving to New Year’s Day.
For the first two months of 2017, 346 residential properties closed. For the sake of time and space (and because it makes for a good visual), here are the number of homes sold by year going back eight years:
With relatively minor exceptions, the number of homes sold has steadily increased almost every year. In fact, from last year to this year the number increased by 5.5 percent, and the total increase in number of sales from 2011 to 2017 is over 61 percent!
If you’re a real estate junkie (and I know you are!) your next question will be, “Okay, so if there are fewer homes being listed and more homes selling, what does that mean for days on market?” And I’m so glad you asked! Again, for the visual impact (average number of days on market for homes closed in January and February):
2017: 125 days
2016: 136 days
2015: 155 days
2014: 154 days
2013: 160 days
2012: 185 days
2011: 149 days
From 2012 to this year, the average days on market (again, just for homes sold in January and February) has dropped by 60 days! That’s a full third less time on the market!
And NOW what you want to know is, “What was the average sales price?”—right? As you might expect, there’s some good news there as well:
Here again, a steady increase in average sales price reflecting a 21 percent increase over the past eight years.
So in summary: over the past eight years (and maybe even longer), here’s what’s been happening in the first two months of the year: the number of new listings has decreased, while the number of sales has increased; the average number of days on market has also decreased, while the average sales price has increased.
Now, that’s not to say that our market has experienced 21 percent appreciate across the board or that every seller has closed in less time than expected. Certainly there are sellers whose personal experience has been tougher and whose values have been lower than expected.
Which is why it’s important to look at both sets of figures. As a buyer or seller, you should know generally where the market is heading, but also specifically what impact, if any, that makes on the home you are looking to buy or sell. Talk to your real estate professional to get a better idea of how these broader trends impact you where you live.
*all figures are taken from the Lynchburg MLS
By Dan Vollmer