NRVLiving - Real Estate. Simplified.

The State of the Market - November 2009

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.

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.

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 - October 2009

Ah, the leaves in the New RIver Valley are changing.  It's one of my favorite times of the year here - until the winter winds decide to blow.

Just as the leaves will change every year, it's election day today and with a lame duck President in place we'll see change in DC, as well - you DID vote, didn't you?  The leaves change, our leadership changes, and the real estate market ... well, it's changed a bit, as well.

I'll repeat it one more time:

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

There are opportunities for buyers and sellers, right now, and a slow and steady approach will serve you well.  That being said, I don't think we'll see significant market rebounds in the short-term so Sellers, if you don't have to sell, don't.  As you can see from the following numbers, anything over 5 months is a buyers market and right now, there aren't any buyers markets.  I'm currently working on an end-of-year market report, I'm interested to see how that works out ... stay tuned for that.  Again, 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.

Area	# of Active Properties	# of Sold Properties	Absorption Rate	Buyer/Seller Market
Blacksburg	216	11	19.64 Months	Buyer
Christiansburg	278	14	19.86 Months	Buyer
Montgomery County	67	8	8.38 Months	Buyer
Floyd County	124	6	20.67 Months	Buyer
Giles County	60	9	6.67 Months	Buyer
Pulaski	105	9	11.67 Months	Buyer
Dublin	113	6	18.83Months	Buyer
Radford	72	10	7.20 Months	Buyer

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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, 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.

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.

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 - July 2008

The first half of the year is behind us, and we're officially on the backside of 2008.� There were some surprising conclusions that came out of the market in the first half of the year, namely that the time it took to sell a home was less, yet prices were stable or falling in most areas except for Blacksburg.� Despite that, June's absorption rate showed balanced markets in Dublin and Christiansburg, with a SELLER'S market in Blacksburg.

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.

Area	Active	�� Sold ���	Absorption Rate	Buyer/Seller Market
Blacksburg	219	52	4.21 Months	Seller
Christiansburg	257	41	6.27 Months	Buyer
Montgomery County	73	6	12.71 Months	Buyer
Floyd County	117	5	23.40 Months	Buyer
Giles County	59	7	8.43 Months	Buyer
Pulaski	103	8	12.88 Months	Buyer
Dublin	117	13	9.00 Months	Buyer
Radford	95	18	5.28 Months	Balanced - Buyer

Sort of standard fare for July, the same thing we've seen for much of the year.� While there have been major fluctuations within various areas (Floyd County was 12 months of inventory in June, 23 in July), the overall average has been pretty consistent.� That's a good sign.� Why?� The market's not overreacting, one way or another to news.� It'll be interesting in the remainder of the year to see how HR 3221 moves the markets, but for now the trend has been slow and steady.� And in Blacksburg, even included a little appreciation, which is a good thing!

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The First Half of 2008

Now that the first half of the year is behind us, I thought I'd take a look at homes sales in the Blacksburg/Christiansburg/Radford area a little bit more.  At the beginning of the month, in the Absorption Rate post, I showed how every market studied has seen Days On Market go down, along with the average sales price, except for Blacksburg - which has actually gone UP in value nearly 5%.  For the chart below, I used Average Sales Price, but to dig in and look at the real strength of the market it's probably best to look at Median Sales Price.

The Average Sales Prices shown above accurately reflect the homes that have sold, but they don't reflect the trending nature of the market.  To do that, I went back and looked at January - June sales that occured between 2004 and 2008.  In order to accurately the trend, I looked at residential homes (detached, condos and townhomes) that sold in Blacksburg, Christiansburg or Radford during that period and graphed them based on the median sales price of all the homes sold. 

Based on those figures, you can see sharp increases between 2004 and 2006, when the market was really hot.  These were definitive Seller markets, with multiple offers commonplace.  Between 2006 and 2007 we saw a shift back toward more balance, and even a Buyer market in some areas.  The plateau that exists between 2007 and 2008 is likely just that - a plateau.  My analysis is that while we might see a sag in the market continue, with little to no appreciation for several more months, we aren't likely to see the decline, month over month, that many other markets have felt. 

Just for fun, I also looked at the number of homes sold during the same period.  A similar pattern, although a decline between 2007 and 2008.  It'll be interesting at the end of the year to see where that ends up.

Truth be told, I doubt that we'll know the real ramifications of the current market until after the November elections.  It's likely that we'll need be in the spring of 2009 that, with the administration in place, and the shakedown of the bailout - er government support - of Fannie Mae and Freddie Mac complete we'll know the real story.

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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.

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 - May 2008

Improvement overall in the market, and a slight improvement over last month.  A 16% increase in the number of homes sold in May versus April, with a drop of a month and a half to just ten months worth of inventory.  That's better than what we saw in January, and similar to what we've seen over the last few months (see the rest of 2008 here).  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.

Area	Active	Sold	Absorption Rate	Buyer/Seller Market
Blacksburg	250	54	4.63 Months	Seller - Balanced
Christiansburg	309	50	6.18 Months	Buyer
Montgomery County	79	6	13.17 Months	Buyer
Floyd County	106	4	26.5 Months	Buyer
Giles County	53	9	5.89 Months	Balanced
Pulaski	109	15	7.27 Months	Buyer
Dublin	115	12	9.58 Months	Buyer
Radford	118	17	6.94 Months	Buyer

I'm going to leave it at that this month, simply because it's been a broken record over the last few months - inflated inventories, longer selling times, a buyer's market.  That's a good thing, honestly - some balance in the market will be good, in the long run. 

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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.

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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The State of the Market - March 2008

Lots of movement in individual market segments over the last month, but virtually no change in the market as a whole between February and March.  In total, February saw 99 properties CLOSE during the month, while March saw 133 properties close.  But March ALSO saw more properties come on the market, as well, so it was virtually a wash.  Overall, 10.55 months worth of inventory on the market right now, but think we're not busy?  I can't believe what this home inspector said ...

Mixed results overall though, with places like Blacksburg, Giles and Pulaski seeing a reduction in the amounts of inventory available, but overall a slight increase total.  Blacksburg in particular has dropped to just over 6 months worth of inventory, which is where I thought we'd be much later into the year - it'll be interesting to see whether that holds.  Still, it's very much a buyer's market.  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.

Area	Active	Sold	Absorption Rate	Buyer/Seller Market
Blacksburg	239	37	6.5 Months	Almost Balanced
Christiansburg	309	30	10.3 Months	Buyer
Montgomery County	83	6	13.8 Months	Buyer
Floyd County	73	6	12.2 Months	Buyer
Giles County	60	7	8.6 Months	Buyer
Pulaski	109	16	6.8 Months	Almost Balanced
Dublin	102	8	12.8 Months	Buyer
Radford	94	7	13.4 Months	Buyer

Interest rates are still very low, and values in the New River Valley are stable ... contact me here if you'd like to do a confidential analysis of your situation.   

The State Of The Market - February 2008

Wow - March 17th and I'm just getting around to doing the absorption rates for February.  I wrote last month that Coldwell Banker Townside had its best year ever last year, as did the NRVLiving Real Estate Team as well.  Very proud of that, but 2008 is a new year and I need to get on the ball ...

Most of the markets we study here have seen improvements between January and February of this year (except for Floyd).   It's not uncommon to see this happen as we head into the spring, as more properties start to come on the market and more properties tend to sell.  Nothing unusual there, and as I wrote about last week we'll continue to see these markets balance out as we head into the spring and summer.  10.26 months worth of inventory on the market at this point, down from 18.73 months worth in January, so a marked improvement but still very much a buyer's market.  It'll likely stay that way through much of the year - I know, I said last month I thought we might see that change in the middle of this year, but I'm revamping that a bit - as the dollar keeps falling, I just wonder how strong the rest of our economy can stay.  There are a lot of really smart people out there debating this very thing, so I'll leave the analyses to them, but that's just my own perception of things.  Remember, 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.

Area	Active	Sold	Absorption Rate	Buyer/Seller Market
Blacksburg	226	29	7.79 Months	Buyer
Christiansburg	278	31	8.97 Months	Buyer
Montgomery County	74	8	9.25 Months	Buyer
Floyd County	73	7	10.43 Months	Buyer
Giles County	56	4	14 Months	Buyer
Pulaski	104	8	13 Months	Buyer
Dublin	102	10	10.2 Months	Buyer
Radford	76	9	8.44 Months	Buyer

From last month (and the month before that, and continuing for most of 2008):

My prediction (which is worth nothing but we'll see whether or not it comes true) - 2008 will be strong for buyers as inventories will remain slightly inflated, and loan rates will remain stable.   Sellers will need to focus more than ever on setting their home apart, and they can do that by having the home ready to sell, and by maintaining an honest perspective of their market position.  If they'll do that, they will benefit from a ready, willing and able pool of buyers.

It's true, pricing is key for sellers and will be for some time.  Market value is only what a buyer is willing to pay for a property, and nothing more.  Case in point - I'm selling my own home for $176500, it closes tomorrow.  My neighbor right next door, with the exact same floorplan, few upgrades and original fixtures, is selling his for $198500.  Can he get it?  I doubt it, but what I believe doesn't matter - if a buyer is willing to pay $20000 more than my sale tomorrow, then market value just increased by more than 10% OVERNIGHT.  I hope I didn't leave money on the table, but if I did then good for him - he's just made a lot of people in the neighborhood very wealthy!

Interest rates are still very low, and values in the New River Valley are stable ... contact me here if you'd like to do a confidential analysis of your situation.   

The State Of The Market - January 2008

2007's done, and we're off to a strong start in 2008.  I wrote last month that 2007 wasn't a bad year for real estate, and boy was I wrong. 

Coldwell Banker Townside had it's best year ever with more than $140 million in real estate sold, and the NRVLiving Real Estate Team set records as well, with 5% of that total!  Townside has been serving the New River Valley for more than 30 years, and last year saw its' highest sales figure ever, in a "down market".  Uh huh. 

One word can describe our market - local. 

Nothing particularly spectacular in this month's absorption rate - we still saw January's market to be reflective of a winter market.  If current activity is any indicator that's about to change for some agents - Pareto's Principle is in full effect in real estate - but overall things were slow for the market.  18.73 months worth of inventory on the market for the month of January, up from 17.71 in December 2007.  Still a buyer's market, but I'm expecting we'll start to see that change as early as mid to late 2008.  Remember, 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.

Area	Active	Sold	Absorption Rate	Buyer/Seller Market
Blacksburg	180	19	9.47 Months	Buyer
Christiansburg	249	22	11.32 Months	Buyer
Montgomery County	63	3	21 Months	Buyer
Floyd County	65	7	9.29 Months	Buyer
Giles County	60	4	15 Months	Buyer
Pulaski	89	4	22.25 Months	Buyer
Dublin	101	2	50.5 Months	Buyer
Radford	66	6	11 Months	Buyer

From last month:

My prediction (which is worth nothing but we'll see whether or not it comes true) - 2008 will be strong for buyers as inventories will remain slightly inflated, and loan rates will remain stable.   Sellers will need to focus more than ever on setting their home apart, and they can do that by having the home ready to sell, and by maintaining an honest perspective of their market position.  If they'll do that, they will benefit from a ready, willing and able pool of buyers.

I still believe that.  Even with the recent fluctuations in rates, which are still low but likely to go up again in the near term, pricing is going to be key for sellers.  We can't go from 20 months worth of inventory to a complete shift in the market overnight, and sellers need to be prepared.  But if you want your home sold, there are agents out there still doing it - here are some great questions to consider asking your next agent.  They're from an agent in Charlottesville and an interview he went on, but they apply well to the New River Valley as well. 

It's In Print, It Must Be True

From Sunday's The Roanoke Times and Sarah Cox ... emphases are mine.
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"What are the real estate issues, nationally and locally, that REALTORS and their associates will face in the new year?  Credit and foreclosures, the mortgage industry, the green industry, REALTORS in a buyer's market, attrition among REALTORS, and national versus local real estate markets are some of them.

While we will examine in further depth each of these issues throughout the year, several professionals have given their comments as 2008 gets underway.

Steve Bodtke, managing broker of Long & Foster Blacksburg, pointed out that despite national pockets, the New River Valley market remains strong.  Jeremy Hart, NRVLiving Real Estate Team (Coldwell Banker Townside) agreed, pointing out that in the last three years, the New River Valley residential market has seen an average six percent appreciation, while the average days on the market (DOM) has dropped by 30 percent.

'Honestly, I was expecting a positive appreciation and higher DOM, but I wasn't expecting those numbers,' said Hart.  He pointed out that while there has been an 18 percent drop in new home sales nationally, the real estate market slow downs have been in California, Nevada, Arizona and Texas.  Locally, the lower DOM can partially be attributed to a slowdown in new home building, because a house could be under construction for six months all the while being 'on the market'.

Bodtke said the strong NRV market follows the most basic economic model of supply and demand.

'Blacksburg and Montgomery County are very appealing to a wide variety of buyers, from outdoor enthusiasts to retiring VT alumni (often one and the same).  Due to the high cost of land and the even higher costs to develop land in the area, coupled with the increasing materials costs, prices of new homes are up.  However, the demand for quality construction in a desirable area is always strong,' he said.

The buyers in this market are looking a bit harder and longer because of the slightly increased inventory.  So, said Bodtke, the more motivated sellers are 'correcting' their prices and not digging in their heels, assuming an appreciation rate that is simply too high.  Hart said he believed that the onus for price positioning lies with the REALTOR.

'We have to set clear expectations with our clients.  You can't argue with the numbers.   During the last half of 2007, homes that were priced right, taking market value and priced a percent or two below, came off the market within a month or two,' he said.

Buyers are looking, and finding, good values.  This does not necessarily mean that they are looking for the cheapest price, said Bodtke, but for quality, sustainability and low-operating cost, often linked to energy efficiency.  Both REALTORS said that going green will have an increased impact in 2008.

Bodtke said the proper approach to this type of construction is to examine the overall cost of home ownership, from type of materials used to the efficiency of the systems in the house.  Hart said that the green industry in the NRV is a trend that will continue to grow.

'It has not had the huge surge in poplularity that we've seen in other places nationally, but it has been growing consistently,' he said.  The Green Living and Energy Expo, sponsored by the Association of Energy Conservation Professionals, held its eighth annual convention Nov. 2-3, 2007 at the Roanoke Civic Center.  The attendance and exhibits have increased in previous years, with more than 2,000 people attending the last event that featured 75 exhibits.  Workshops included a biofuels seminar, the house of pressure, and presentations on residential solar, hybrid cars, global warming, on-demand water heaters and green roofs.

'We will continue to see more and more companies that are either growing that as a part of their business or focusing their entire business on influencing the green market,' said Hart.

Both REALTORS said they also see an attrition in their industry that began this past year.  Hart attributes this to the change in the market.

'When things get tough, people start to leave,' he said.

Bodtke pointed out that it's common in the real estate industry for people to 'jump in when the market is hot.  This was the same case with the 'fly by night' lenders and appraisers that no one had ever heard of.  Many of them are gone, never to be seen or heard of again.  This industry has a way of correcting itself, and that's a good thing.'

Hart also said that of the four million people currently in the industry in the United States, nearly 60 percent are at or nearing retirement age.

'If it's harder to sell real estate, some people don't want to do it.  As things get harder and the workforce gets older, we'll see more and more people get out of the industry.  There aren't as many people waiting int he wings as there where when I got into it five years ago,' he said.
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The State of the Market - December 2007

That's it!  2007 is in the bag!  It certainly wasn't a bad year for real estate; not as bad as people would make it out to be.  Remember - real estate is local, so it's important to remember what's happening HERE locally, not necessarily what's going on across the country.  More than 50% of the country experienced a POSITIVE real estate market in 2007, including the New River Valley.  Wait ... let me add to that.  The New River Valley has seen a positive real estate market for several years! 

(We have a lot to be thankful for.)

Ah, the winter market.  17.71 months worth of inventory on the market for the month of December.  Which, coincidentally, translates to a buyer's market.  Remember, 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.

Nothing much to fear right now, though - this is typical for this time of year.  The holidays typically slow things down, the majority of buyers are off doing other things and only viewing your home from their computer screen (which is why it's important to be online!) but trust me - they're viewing your home.  Those buyers we're working with that are ready to buy are already making plans with us on their timelines and when they need to be in their new home, so get ready ... if history is any indication, you'll start seeing traffic pick up substantially in another six weeks. 

Area	Active	Sold	Absorption Rate	Buyer/Seller Market
Blacksburg	150	18	8.33 Months	Buyer
Christiansburg	238	12	19.83 Months	Buyer
Montgomery County	56	2	28 Months	Buyer
Floyd County	69	4	17.25 Months	Buyer
Giles County	96	8	12 Months	Buyer
Pulaski	86	6	14.30 Months	Buyer
Dublin	78	6	13 Months	Buyer
Radford	58	2	29 Months	Buyer

My prediction (which is worth nothing but we'll see whether or not it comes true) - 2008 will be strong for buyers as inventories will remain slightly inflated, and loan rates will remain stable.   Sellers will need to focus more than ever on setting their home apart, and they can do that by having the home ready to sell, and by maintaining an honest perspective of their market position.  If they'll do that, they will benefit from a ready, willing and able pool of buyers.

The State of the Market - November 2007

Not a lot of change in this month's report from last month ... well, unless you consider Radford.  Look at that!  78 properties on the market in Radford, with one sale in the month of November.  At that rate, it'd take 78 months to sell all the inventory in Radford (go on, make all the comments you want about Quick Math - even my calculator looked at me and said "Really, you're going to calculate that?")  Throwing Radford out of the mix, the overall average of 9.52 months worth of inventory is just slightly less than last month's 9.89 and the 9.45 in August, so I think the numbers bear out the fact that we are certainly in a winter market.  Which, coincidentally, translates to a buyer's market.  Remember, 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.

Don't forget that for just a few more weeks, until the end of December, Mark Weddle at Salem Financial will be providing a FREE APPRAISAL to anyone who refinances OR sets up a new loan in the month of December.  I know there are some of you that need to do this - we've got two closings scheduled in the next few weeks ourselves so there are certainly buyers out there!  Call (540-961-3966) or email Mark today and get this taken care of!

Area	Active	Sold	Absorption Rate	Buyer/Seller Market
Blacksburg	190	18	10.56 Months	Buyer
Christiansburg	255	32	7.97 Months	Buyer
Montgomery County	66	7	9.43 Months	Buyer
Floyd County	79	9	8.78 Months	Buyer
Giles County	99	10	9.90 Months	Buyer
Pulaski	116	11	10.55 Months	Buyer
Dublin	104	11	9.45 Months	Buyer
Radford	78	1	78 Months	Buyer

Take Note - this is not a bad time to be considering buying or selling real estate.  If you're selling, we need to  talk about ways to really get you the right kind of exposure for your home.  We should be adjusting our marketing to be specific for your house, not just "'cause this is the way we've always done it".  I'm still taking listings because people are still moving - but we need to be realistic and patient, among other things.  And if you're buying, we need to talk.  Opportunities abound out there, let's take advantage of them. 

If you'd like more specific data about this report, or anything else pertaining to real estate in the New River Valley, don't hesitate to contact us !  Or, hit us up on our Facebook or Twitter accounts!

Happy buying and selling!

Thoughts On Absorption Rates - Need Feedback From The Readers

Hi everyone - a quick note about something I've been considering for awhile ... I'm interested in what your thoughts are, so please consider it, email me, use Plugoo on the lefthand side of the blog, Twitter me ... doesn't matter how you do it, just let me know what you think!  Man, do I give you enough communication tools!  Can you say overkill?

It all came from the fact that I was listening to the radio one day and an "expert" was saying how the stock market was even that week.  He went on to say that on Monday it had been down, Tuesday and Wednesday it had been up, and Thursday it was down a bit lower than Wednesday's close.  He THEN went on to say that this was negative news, that two downward spikes in the course of the week indicated a negative trend and that investors were pulling out of the market left and right.

I had lunch with an insurance friend of mine today, and we were talking about the idea of risk vs. reward in investing, and as we talked we discussed how you can't look at the stock market on a daily basis, or a weekly basis, or maybe even a monthly basis.  You have to look at it long-term, and measure your comfort level with risk vs. reward based on long-term, rather than short-term, market performance.  Now, I'm the biggest hypocrite when it comes to long-term vs. short-term.  Anyone who knows me is going to tell you that I'm all about instant gratification.  Case(s) in point - I purchased an investment property this year after walking in and seeing it for the first time ... VACANT.  No renter, no idea where I'd get a renter, but I knew it was a good investment and I went for it. Instant gratification.  My iPhone?  Instant gratification, I was going to wait for my contract to be up in 2009, I waited 9 days from the first release.  Hell, I bought a car on eBay once - if "Buy It Now" isn't an example of instant gratification, I don't know what is.

So what's that have to do with anything?  I don't know ... no, my point is that when I put these absorption rate figures out, I'm looking at a very specific snapshot of the market.  It's instant gratification, real estate-reporting style.  But one month worth of data might not be giving us as accurate a snapshot of the market as say, three months might.  If you find the monthly reports helpful, great!  Let me know that.  But my thought right now is that we might get a better feel for how the market is doing if we expanded the time between reports.  So I'm interested to know what you, readers who are all WAY smarter than I, have to say about it.  HMMMMMMM ...?

The State of the Market - October 2007

I've been a bit busy lately and haven't gotten around to this post, my apologies for that. 

Certainly some adjustments from the report last month, and in-line with where we typically are in the winter months.  If you look at the overall average of 9.89 months, you'll see that it's very much a buyer's market.  10 months worth of inventory, on average, spells a slow market for the winter.  It's interesting how quickly things turn, though ... last month, Montgomery County was at 6.8 months, Floyd was at 9 months and Pulaski was at less than 4 months.  Now?  Almost 12 months, 6 months and 10 months, respectively.  Watch the big picture - think of this market as if you're driving a car ... a buyer's car.  Sometimes, you're driving and you go up a hill - as a buyer, that's indicative of a seller's market.  It's harder to get up the hill, things just keep coming off the market before you can get to them - you'll get there, but it might take you a little longer.  And sometimes, you go through a dip in the road.  Your speed increases (there's more on the market), things get a little faster (and rates are a little bit better) and you're cruising right along - everything's in your favor.  Eventually, that hill or that dip will turn into a culdesac, and you'll be right back out onto the street again.  Don't be left on the street ...

I've said it for the last couple of months, and I'll continue to say it.  If you're looking to buy a home, now is your time.  I spoke with Mark Weddle at Salem Financial today and he's quoting rates as low as he has in quite some time ... that's in your favor as a buyer, so take advantage of that.  Remember that the problems throughout much of the nation are felt on a much smaller scale in the New River Valley, which continues to remain insulated from heavy blows to the market.  We'll go up and down, just like everyone else, but over the long haul the dip will even back out. 

Blacksburg's absorption rate increased from last month, and virtually every other area went up as well.  As a whole, the market average is 9.89 months worth of inventory - almost identical to where we were last month (9.45 months).  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.   

Area	Active	Sold	Absorption Rate	Buyer/Seller Market
Blacksburg	204	19	10.74 Months	Buyer
Christiansburg	274	26	10.54 Months	Buyer
Montgomery County	71	6	11.83 Months	Buyer
Floyd County	80	14	5.71 Months	Balanced
Giles County	59	5	11.80 Months	Buyer
Pulaski	126	12	10.50 Months	Buyer
Dublin	118	19	6.05 Months	Buyer
Radford	80	11	7.27 Months	Buyer

Take Note - this is not a bad time to be considering buying or selling real estate.  If you're selling, we need to  talk about ways to really get you the right kind of exposure for your home.  We should be adjusting our marketing to be specific for your house, not just "'cause this is the way we've always done it".  I'm still taking listings because people are still moving - but we need to be realistic and patient, among other things.  And if you're buying, we need to talk.  Opportunities abound out there, let's take advantage of them. 

If you'd like more specific data about this report, or anything else pertaining to real estate in the New River Valley, don't hesitate to contact us by email or Instant Messenger!  Or, hit us up on our Twitter account!

Happy buying and selling!