So apparently we're going to get some snow this weekend... on top of the 20+ inches we've already received.  Needless to say, all this inclement weather doesn't do much for the local housing market.  However, as one of my former brokers used to say... "I LOVE showing houses in the snow... because you know those buyers REALLY want to buy a house!" 

So if you are one of those buyers who's ready to brave the elements to see the home of your dreams... or if you're one of those sellers hoping for a showing to one of those buyers... let's see how things look one month into 2010.

This past month (January 2010) we closed on 87 residential sales (compared to 84 in January 2009).  Of those 87 sales, the average home sold had 3 bedrooms and 2 baths (no surprise there), had ah average list price of around $186,000 and an average sales price of roughly $174,000.  The average number of days these homes were on the market was 128 days.

Now let's take a closer look... of these 87 homes that sold, 11 were in Forest (12.6%), 11 in the town of Bedford (12.6%) an 38 in Lynchburg City (43.6%).  The breakdown by price range is as follows: 22 homes sold under $100k (25.25%), 22 sold between $100k and $150k (25.25%), 24 sold between $150k and $200k (27.5%) and 19 sold over $200k (21.8%).

Finally, out of the 87 homes that sold, only 24 of them had been on the market 45 days or less (27.5%).  Nearly half of those homes were in Lynchburg City and exactly half were priced between $100,000 and $200,000.  Fifteen of these homes had 3 bedrooms and on average had right around 1800 square feet.

Now why is any of this important?  As a buyer, you should know that if you're looking at 3 bedroom homes in Lynchburg City (particularly zip code 24502) priced between $100,000 and $150,000 you aren't alone!  That's the hot spot in the market right now.  Understand that roughly 1 in 4 buyers last month bought a home very similar to what you've been looking at.  As a seller, you need to understand that if you fit these criteria and you aren't getting any showings - you're priced too high.  The buyers are looking and if they aren't looking at you, they have rejected your price in favor of more reasonable sellers.

Well we're right at the end of September, marking the close of the third quarter for 2009.  While there are many reports about consumer sentiment and jobless claims, one element of our economy that continues to make headlines is our housing sector.  Let's look at January through August numbers for this year in Lynchburg, and compare those with last year's numbers.

Where are the Buyers?

As the economic rollercoaster continues to effect all sectors of business across the country, home sellers (and real estate agents) in many areas are left to wonder ‘Where are our buyers?”  We’ve continually touted our area’s stable market and varied pool of buyers, but let’s take a look at specifically ‘who’ has been buying ‘what’ recently.

For the month of September we saw 210 homes close – 73 of those in Lynchburg City (35%), 50 in Bedford County (24%), 46 in Campbell County (22%) and 16 in Amherst County (7%).  This leaves 25 homes, or 12%, for the remaining surrounding counties.

Looking at price ranges, we notice the following:  38 homes (18%) were listed for less than $100,000; 70 homes (33%) were listed between $100,000 and $150,000; another 50 home (23%) were listed between $150,000 and $200,000.  Finally, 40 homes (19%) were listed between $200,000 and $300,000 – leaving 12 homes (6%) that sold with a list price exceeding $300,000.

If you were able to see those statistics in a graph or chart, you would clearly notice the largest percentage of sold homes falling in the $100,000 to $200,000 range.  This is not to say more expensive homes (or less expensive homes, for that matter) are not selling.  However, the data bears out the fact that the most popular homes – at least in September – were in the $100-$200k range.

Some other facts worth noting:  the average list price across 210 sold homes was $169,000 and the average sold price was $164,188.  This give us an average list vs. sold ratio of just over 97%.  (If one takes the list vs. sold price for each individual listing and average those percentages, it comes out – almost exactly – to 97%).  Also, the average number of days on market (from the date the property was listed to the date it went under contract) was 107 days.  The best price range for days on market, ironically, was the $200-$300k range, with an average of just 95 days.

So there’s a snapshot of the current buyers in our market.  If you’re selling a home right now, you know a little better what you’re up against, and hopefully, you’re better prepared to make the necessary adjustments.

The Virginia Association of REALTORS (VAR) recently released a report for the 2nd quarter of 2008 and there is much about it that is interesting and encouraging.  Covering everything form sold homes and pending transactions to the foreclosure trends across the state, the report shows where we were, where we are now, and where we're heading.

First, looking to the number of homes sold in the 2nd quarter (April-June), the report analyzes the statistics from 24 metro and regional areas across the state. Lynchburg reports 646 closed sales for 2008, and 802 from 2007 – a change of -19%. Its important to note that a19% drop is not nearly as drastic as other areas like Williamsburg (-39% change) and Dan River (-36% change).

Second, the Median Sales Price for the Lynchburg area was $152,593 for the 2nd quarter of this year, and $149,975 for 2nd quarter 2007. Lynchburg was one of only 7 regions to post either a neutral or positive gain in this area. The statewide median sales price for 2008 was $273,597 and for 2007 was $257,102 – a gain of 6%.

Next, the Average Sales Price for our area during the 2nd quarter 2008 was $175,224, following 2007’s average of $177,143 – a drop in value of 1%. Only four other regions posted better results – Dan River with a 0% change, Roanoke Valley with a 0% change, South Central Region with a 10% gain and Williamsburg with a 10% gain. Statewide, the Average Sales Price for 2008 was $319,462 and for 2007 was $343,202, for a collective 6% decline.

The Pending Sales Index denotes ‘signed sales contracts’ for the 2nd quarter; the Lynchburg region saw 817 properties go under contract during the quarter, compared to 1140 for the same quarter in 2007 – a decrease of 28%. While the state average showed a year-over-year decrease of 20%, there were a number of localities with more positive numbers for this past quarter.

One final word regarding foreclosures; in December 2006 Virginia ranked 41st in the nation in foreclosure rates. By June 2008 that ranking had risen to 11th place – a disturbing trend. However, to quote the report; "the foreclosure problem is not statewide, and in fact is dominated by the foreclosure problems in Northern Virginia. There are also problems in the metro areas of Richmond, Virginia Beach and Winchester, but the rest of the state is experiencing very minimal foreclosure issues with only a handful in the other metropolitan areas." In fact, on a chart showing foreclosures in Virginia Metro Areas, Lynchburg does not even register on the graph.

I believe this data all points to stability in many areas across our state, and the potential for growth in the next 12 months.

The question I get asked most often has to be, "So how is the market these days?"  Even folks who aren't buying or selling a home want to know.  Why is that?  I believe its becuase the state of any local economy is largely influenced by how well the housing market is fairing.  And remember... all real estate IS local.  So let's see just how the market really IS doing these days.

 

One way to assess the market is to see what the average sales prices are this year versus the same period last year and the year before.  From June 1 through July 31 of this year, we closed on 489 residental properties, with an average sales price of $186,462.  For the same period in 2007 there were 548 homes sold at an average sales price of $187,657.  Backing up one more year, in 2006 the statistics for the same period were 676 sold homes at an average sales price of $182,572.

 

So it would appear that while home values this year are off by about $1000 (a negligible amount), we're still up overall from 2006's numbers.  However, this is for our entire market.  What about more specific numbers for the region's different areas?

 

Let's first look at Lynchburg City.  In June & July 2006, there were 251 residential properties sold, average sales price of $168,022.  In the same period of 2007 there were 210 sales, average sales price of $164,514.  Finally, this year there were 189 sales, average sale price of $170,279 - an INCREASE over the previous two years!

 

In Bedford County, June & July 2006, 165 homes sold for an average sales price of $228,778; same period of 2007 there were 152 sales, average sales price of $250,709; this year, same period, there were 131 sales, average sales price of $235,980.  Again, while this figure is dow from the previous year, its still better than the 2006 numbers.

 

Finally, in Campbell County, June & July 2006, 128 sales with an average of $159,372; 2007's nubmers were 102 sales, average of 173,421; this year there were 81 sales with an average sales price of $160,756.  Again, while this figure is down from the previous year, it holds at the 2006 level.

 

This underscores my answer to the above question, which is this:  the VALUE of homes has held relatively steady, but the number of homes BEING SOLD has dropped off.  So while people are still buying homes, they aren't buying them as frequently as they used to in the past.

 

“Boy, its really a Buyer’s Market, isn’t it?”  I’ve been hearing this more and more often, and the truth is, it IS a Buyer’s Market.  But if you’re a buyer – or more importantly, a seller – what does that mean for you?

Well first, let’s look at a few stats.  In previous articles, we’ve discussed the concept of ‘market saturation’ – a figure determined by taking the number of homes currently on the market and dividing by the number of homes that have sold within the past 30 days.  For example: if, on a given day, there are 500 homes listed in Lynchburg, and within the past 30 days 100 have closed, that would give us a 5 month supply.  If we stopped listing homes on that day, in theory, it would take us 5 months to be ‘sold out’ of our inventory.

We measure how balanced any market is by how many months of ‘inventory’ we have at a given point.  Traditionally, a well-balanced market will have a 6-month supply of homes.  Much more than 6 months indicates an increasing buyer’s market, much less indicates a strong seller’s market.

As of April 1, 2008 there were 1802 active residential listings in our MLS and 163 homes sold in the month of March, giving us an 11-month supply of inventory.  Last year as of April 1st there were 1083 residential listings and 257 closed sales in March, for an inventory of 4.2 months.  Quite clearly the balance has shifted somewhat.

So back to the original question – what does this mean if you’re a buyer or seller TODAY?  If you plan to buy a home in the next few months, understand that while you do have greater control over the process, it does not mean every seller is desperate and will accept significantly reduced offers.  Just because there are more options does not mean the actual VALUE of homes is any less. 

If you’re a seller, the good news is that people are still buying and selling homes, and that’s not going to change.  But if you are serious about selling your home, be prepared to make it stand out – listen to your agent and honor their suggestions.  Above all, realize that you MUST be competitively priced and in better showing condition than your competition.
   

Welcome Spring!  With each passing year, time goes by faster and faster.  We’re almost through our first quarter of 2008, and while our national economy still struggles, our local housing market still holds the promise of a fair year.  While not seeing the kind of volume enjoyed in previous years, there is still good news to share.

This week, we’ll focus on the data for SOLD single family homes from January 1 through February 29 2008.  During that time period, 333 such homes closed, with an average list price of $193,963, and average sales price of $186,116 and an average number of days on the market of 135.  All in all, not bad for the early winter months.

Now let’s see which homes showed the best returns.  The price range with the largest share of these closings was the $120,000 to $160,000 range – 79 closed homes, or almost 24% of the total volume.  Within that group, homes that fell within this price range AND had 3 bedrooms accounted for 50% of the closings.

Homes priced at $250,000 or more accounted for the second highest market share with 70 closings, or 21% of the total volume.  In this category, homes with 4 bedrooms accounted for nearly half of those that sold.

A second factor to consider is the “list price vs. sales price” – in other words, how much of the asking price did the homes that sold actually make?  Again, the category with the highest percentage was the $120-$160,000 range – with those homes bringing 97.88% of their asking price. The next highest price range was $160-$200,000 – those homes also brought 97.83% of their asking price.

Finally, let’s look at which homes are selling the fastest.  Homes priced between $90-$100,000 spent an average of 88 days on the market.  The next most active price range was the $200-$250,000 range, where homes spent an average of 107 days on the market.

As always, by providing these statistics, we hope to provide consumer confidence to both buyers and sellers in the greater Lynchburg market.  Contact your REALTOR if you have additional questions about the state of the market in our area.