Predicting The Future of Real Estate!
If the media says it is it right...? I heard it on the news....We don't have many homes in foreclosure in the New River Valley and sellers are not taking offers that 20% less than their sales prices, so what is up? Predicting the future of real estate in the New River Valley may not be difficult if we base our predictions on the history of our housing market.
What influence does the big picture have on the smaller picture? More importantly, if national sales of homes are down, our buyers think that sale prices are down in the New River Valley when statistics may often be the opposite. Of course, there are times when national issues greatly affect our local economy like the effects created by the events of 9/11. There are also times when local events affect the nation such as the events at Virginia Tech on April 16th, 2007. Our local economy faired well during both events in the past.
As I look out my window which faces Main Street in Blacksburg, I see streets filled with loyal Virginia Tech fans arriving here to watch the Thursday night ballgame. This week the number of customers walking into our office to buy a home has increased. As I drive through Blacksburg neighborhoods, I have seen few foreclosures. In fact, the number of foreclosures in Blacksburg was 8 from July 15th - October 15th according to the VAR Trends in the Virginia Housing Market (3rd Quarter Report) source Realty Trac GMC: Center for Regional Analysis.
Our market was thriving until August of 2008, but already I am seeing signs of more activity.
Housing Inventory in the New River Valley of Virginia
Months of Inventory
Given that there were no dramatic area invents that occurred in August of 2008, it is probably fair to say that the national economic disaster strongly influenced our local market which has been moderate and stable since 2005 when it was at its peak. In December of 2007 we had a 23. 11 month inventory of residential homes that was down to a 14.76 month inventory as show above. In October, the sales price to list price ratios showed a difference in prices of the following:
Blacksburg Residential Homes -$6,525
Christiansburg Residential Homes -$5,745
Giles Residential Homes -$9,540
Montgomery County Residential Homes -$2,591
Pulaski County Residential Homes -$7,692
Radford City Residential Homes -$9,290
Even though less people were buying homes in October, the average sales price was 4% less than the average list price for these areas. What would these local statistics indicate? I think that local statistics suggest that we have a strong and diverse economy that was thriving despite national economic news until August 2008. According to our local MLS sales statistics for October, Blacksburg homes sales are averaging $243,025 while Radford homes sales were averaging $132,550.
Not only do we have a good supply of properties but we have varied price ranges available. We have seen similar inventory changes last year before we experienced a healthy spring market. My prediction: The New River Valley housing market is a good market for homeowners and investors. Before making a decision about the real estate market, buyers and sellers should consider the national and local real estate trends.
* Statistic quoted from NRVAR "My Market" MLS report. These statistics are deemed to be reliable but now guaranteed.