We find ourselves at mid year and I have just compiled a market report for June for our office. Though this is hardly the place to post all of the findings, here are just a few of the numbers and we're seeing:
1) The good news is that marketing time is down from the same year to date in 2007. In '07 homes spent an average of 99 days on the market compared to 89 days in '08. Marketing time is a great barometer of just how motivated seller have become as there is a direct correlation between time on the market and the sales price. In times like these, the closer a property is to market value, the more drama and energy it creates generating more showings and ultimately expedites negotions and contracts
2) The average sales price is just under $150,000 ($149,694), Compared to June of last this marks a $10,000+ decrease as the average sales price was $138,700 in 2007. The meat of the market continues to be in the $120,000 to under $180,000 with that swath of price points constituting 54% of the sales volume
3) Total house sales in June were $19M vis a vis last year's volume of $32M. Simple math shows a 40% decline in this statistic.
People often ask, "When do you think things will get better?" My answer to that question is, "when the inventory is reduced by at least half." The fact is that we have 1227 homes for sale in our service area. A healthy, balanced market will have about 500 properties vying for consumer attention.
Spring is in the air in Lowndes county and we find ourselves in the midst of the free for all fever pitch of activity that is the end of school year. Baseball season ending, dance recitals, graduation, and Memorial day vacation are all coming to a head.
Of course I'm just reaching for an excuse to not have written since late April, lame as that is.
I do,however, have some market information that I hope is helpful. My sources are the Valdosta Board of Realtors MLS and the Spring '08 residential market report which was expertly prepared by Ms.Susan Morey of First State Bank.
Last month our MLS recorded an even 100 sales. The bulk of these sales, a whopping 71% occured between the $120,000 price mark and sharply dropped off just north of the $185,000 threshold. Sales above the $220K price point were slim with the slowest increment being the $240-$250K at nearly a year (358 Days).
Here's a trend that's worth noting: Just under a fourth of he sales took place outside of Valdosta-Lowndes County in Brooks, Cook, Lanier, but the bulk of the sales being in Nashville-Berrian County.
The First State report is incredibly well prepared and offers some excellent unbiased Information, most notably:
The first quarter's number of building permits pulled is just 173. Annualized this equates to under 700 permits for the year 2008. To put this munber in perspective, understand that over the past four years the number of permits pulled annually has been between 900 and 1100.
The sales volume of October '06 - March '07 compared to October '07 - March '08 indicates a 39% decrease in sales.
I have a full copy of the First State report and will be happy to e-mail it to whoever wants it because our firends there prepared it for the sole purpose of educating anyone who is keeping an eye on the market. Just e-mail me at tillmanrealty@bellsotuh.net
Make yourself scarce - For both agents and sellers there are few things more athan that one out of every ten seller who just insists upon hanging around their house during broker caravan, open houses and the cardinal of all sins, during private showings. I don't mean to be insenstive to the emotional attachment or motivation/eagerness that some sellers may have, but a good agent and especially most buyers don't want the seller present.
Here's why; we genuinely invite candid feedback on properties that we show. With a seller present the buyer doesn't feel comfortable telling us what he or she really thinks about the house. Many times a buyer may have an objection to something that is very easy to overcome. For example, in the midst of a showing I've had a buyer tell me they couldn't possibly buy this house because they hated the wallpaper border in the kitchen. Well, a couple of hundred bucks and a paint brush (that I'm never afraid to use) cured that problem. Would that buyer have told me that in the prescence of the seller? Most likely not. And more likely they may well have forgotten to tell me what they hated about the house once we left and the sale wouldn't hasv
Sellers, do like the Amytiville Horror House and "Get Out!" Trust me, we don't want to see you there and neither do our buying clients. Remember there may be something innocuous that can be helped, but we thrive on imupulsive,unfiltered feedback and that's just about impossible to get with a seller hanging around...
In fifteen years of working our market, I can't recall a time when it was more "challenging" than now to move a home from being on the market to having it closed. "Challenging", of course, is the word that many of us in the business are using to package the current situation instead of having the balls to use the word "tough".
Our residential inventory has grown from around 600 pieces just a few years ago to over 1200 today. Many price points over the $250K mark (In today's culture that's almost a starter home) are taking nine months to sell as opposed to an average of under 100 days back in the good ol' days of '02-'06. Credit underwritting criteria has tightened signifcantly as many lenders are not even wanting to talk to borrowers sporting cedit scores of below 650 in the midst of the nationwide mortgage mess.
All of these components point to one basic idea for today's seller: If you expect to have a prayer of selling anytime soon, you've got to make the decision to treat this like a business transaction devoid of the emotion and get competitive in the marketing. Here's a couple of things to remember.
1) Look at your property objectively (as a buyer would) and clean/fix it up like a retailer would - Today's buyer has many choices in every $10,000 price increment of our market. Some rotten wood that you have gotten used to seeing and the smudges on windows left there by your kids may just kill a sale. "Aw c'mon man! You can't tell me that something that stupid could nix a deal", you may be saying. Well, uh yeah that's exactly what I'm saying. Because what might seem like an innocuous, easy-to-fix defect can cause a buyer to (however subconciously) wonder what else might be wrong that's not so obvious. Here's a suggestion; have your house preinspected by a certified (NACHI or ASHI) home inspector. Then repair what the inspector suggests. Finally, make the results of the report known to your prospects. Leave the report on the kitchen counter, as well as paid invoices of all the work you've had done (by reputable companies of course). Today, Realtors even have the capability of scanning those documments and making them available to cooperating agents in our MLS.
I can see that this will take more that this one sitting to write this article. Besides I've got to catch up on the last episode of LOST before the new one comes out tommorrow...
In industry climates like these, we are all afforded a chance to catch our breath and we finally have time to "look under the hood" and really evaluate our best practices in brokerage and individual agent businesses. Many offices within the C-21 system and the business as a whole are looking at expenditures through a new lens, particularly in the area of marketing efforts.
Ask most agents when the last time they got a lead from a newspaper ad was and they won't be able to tell you. Ask them how many calls they've gotten over the past five years from newspaper and I'd be surprised if they could count them on more than one hand.
Folks, here's what most companies won't tell you; newspaper ads are done in large part to a) appease sellers and/or b) attract new recruits. Many offices argue that they have to advertise in local papers because ABC and XYZ companies do(!). Huh?
In our company we believe that there has been an overarching and profound shift in the way brokerage is being carried out today. This is not the same world it was even nine months ago. Along with the shifts in consumer confidence, economics, and the number of real estate agents in the world, buyers are looking to the internet more than ever before.
Think about it just for a few moments. With $3+ per gallon gasoline,how do you shop for a big ticket item? Isn't there something to be said for knowing about a product market before searching in earnest? When you ae trying to find a business,where do you turn? How many of us leave a computer on 24/7 so it's ready if we need info quickly? Is there a more efficient way than the internet to do that? Do you smell what I'm stepping in???
Consider this: 75% of all adults in our nation have access to the internet and 86% of ALL real estate searches begin there. It is becoming apparent that the internet is maturing and is more democratized than ever before. The average american spends 44% of their media consumption time online with an average of 14 hours per week. Given these facts, here's a shocker;most real estate brokerages spend less than 6% of their marketing budgets on the internet!!!
C-21 corporate is really blazing the path and setting an example for it's franchisees. They are doing very little print ads, but are heavily investing in banner ads on popular web sites like MSN and Fox News. They are also heavily into the search engine race with real estate specific sites like zillow, trulia, and loopnet, not to mention general engines like yahoo and google. Did you know there are some 8 billion searches per month in the U.S. alone? That's an average of 44 searches per person per month.
At winnersville we are in the infancy of developing our new website, but we qare constantly adding new content. This blog is a part of that initiative. The video is also a part. We are investing in Search Engine Optimization. As new things come along, we want to continue breaking new ground in our region with our internet prescence.
Regardless of all the doom and gloom being pronounced by the pundits, let me assert that people are still buying real estate in the Valdosta-Lowndes County markets. Don't get me wrong because times are tough. Our listing inventory has crested 1200 houses for sale and current absorption figures indicate that we have a 12.6 month suppy of inventory in our MLS. An (actually really good and well researched) article in this past week's Valdosta Daily Times indicates that foreclosures have plateued at around fifty per month and have maintained that level since this time last year.
People are still buying regardless of what the media would have the public believe. However, things aresofter and slower and that presents us all with certain challenges. The National Asociation of Realtors Chief Economist, Lawrence Yun, maintains that a good 80% of today's buying pool is sitting on the fence for the simple reason that they have property to move before reinvesting in another home.
This takes time, of course. Often times what we are seeing is that it may take anywhere from 12 to 24 months before a prospect incubates to become a bona fide buyer. This is an obvious change from the good ol' days of say '02-'05 in which prospects would either buy within a few weeks or at worst a few months because they had more confidence in the market and thus more options (swing loans, etc.).
People just won't stick their necks out like that anymore and really, who can blame them. This is a time of prudence and careful decision making as opposed to the swagger of just several short years ago.
But here's what all this means to seller. buyers and professional. Buyers now have the element of time to make decisions and as they are waiting anywhere from 12 to 24 months they can digest and assimilate a lot of information within that period of time. So, by the time they step into the negotiating arena, they are usually very well versed and sophisticated about a local market in terms of values, financing options, and local customs and concessions.
For the realtor, the name of the game is follow up. We now have the ability to automatically e-mail clients with property profiles that fit their parameters once such a property hits the market. Also, contact management software has never been as intutive as it is today. One of the great features of the LeadRouter System that we are now getting service for is that it has contact management software that prompts agents to follow up within a defined period of time. If an agent doesn't follow up, they don't get fresh leads as the system reasons that the agent is too busy to service new business. The broker can also look over the agent's shoulder as well. Yeah it sounds a little creepy and big brotherish, but accountability is becoming a big buzzword in our industry.
Okay Sellers, for you all of this points to the ever increasing need to PRICE PROPERTY RIGHT TO BEGIN WITH (!!!!! And if I had a way to highlight that last statement,I would). With an inventory of 1200 properties, houses in our services area are almost commodities with buyers caring very little for spending extra money for amenities and upgrades. We have several agents in this office who are still selling houses very strongly. I asked on e of them this morning what was the secret of her sucess and without hesitation it was that her listings have all been priced properly from the very first...
I spent an interesting few hours today on a telecon with top brokers from around the Southeast about a new tech initiative that C -21 is offering all it's franchisees. It's called LeadRouter and carries the main purpose of eqiupping offices to handle leads generated by the internet.
It carries a huge value for agents, brokers, and sellers alike in that once an internet lead is generated the e-mail (or other communique) is translated into a voice format that calls an agent for an immediate response. In the event an agent doesn't respond within a time peramater set by admin, the call goes to an agent on duty.
Many are saying that for the industry, LeadRouter may well be the most innovative tech advancement to come along since the internet. Hmmm... That's a bold claim,but one that might carry some weight.
Here's the deal; we are entering into an age that within the industry we are calling Web 2.0. Basically this is the second coming of the web in the arena of real estate sales. The internet is becoming more important than ever and at our company, we are investing a lot of time and energy into our online prescence.
The problem often is that as an industry standard, the average response time to an internet lead is 56 hours(!!!!). As we say in South Georgia, That dog won't hunt. What's more, it has been reported that over 50% of internet lead are NEVER followed up on. That's where leadrouter comes in. LR sends a message to the ultimately responsible party (that's me a our company) who can then make sure that a response has been made in a timely manner.
Today's consumer/buyer demands immediate response and in a world where information is ever shifting, a tool like LeadRouter is imperative. We are in the process of having service provided within the next several months.
Well, I felt real confident wih the info I posted on Friday because the numbers that I ran on Monday really couldn't have changed that much, could they?
Each month I run the absortion rate at the beginning of the month based upon last month's activity. The absorption rate is a great barometer of the health of the market and it is actually very easy to determine. Basically you take the number of listing and divide it by the number of consumated sales within the proceeding month. The dividend then is the number of months worth of inventory that we have given market conditions.
So what is our absorption rate? We now have 1227 homes for sale (The Inventory, which is up considerably from my last post) and last month we had 97 closed transactions among the thirty three offices that comprise the Valdosta Board of Realtors Multiple Lisitng System. That gives us an absorption value of 12.6 months.
To lend some context to this figure consider this; two years ago the absorption rate was clocking in between four to five months consistently. What this means to the consumer is more competition and longer marketing time.
Given this scenario and market climate, it has never been more important for realtors and their clients/sellers to price property right from the very beginning...
Despite a lot of apprehension in the market, we are beggining to see signs of improvement. Inventory is remainding steady at just below 1100 residential listings within our service area. Quarterly figures gleaned from our MLS show that there have been 474 total transactions in the first quarter with an average marketing time of 117 days of exposure.
The National Association of Realtors reported a 2.9% increase in sales in March over those posted in February. Practitioners around the nation are reporting a leveling of seller traffic and a slight uptick in buyer activity. Practitioners are also gaining confidence about the near future of the market and feel that the pendulum has begun to swing in the opposite direction.
We just shot our first television commercial last week. Look for it to run hot and heavy during the local news on WALB over the next three months. As print advertising continues to weaken in generating calls, we anticipate that electronic media will drive more people to our website. Last month our web activity spiked as we neared the 2000 mark of visitors.
C-21 corporate is heavily running ads promoting homeownership on both television and internet search engines like Yahoo, Google, Trulia, and Zillow. The ads are slick; Very postmodern feel and have tested well among the targeted generations of X and Y...
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
;)
;)
