By Dan Vollmer, Associate Broker, ReMax 1st Olympic
Remember back to your middle and high school days, when everyone came back from Christmas break? Two things happened: First, everyone got to show off all the clothes, shoes, and other great stuff they got for Christmas. That was the fun part. But second, it took about a week for everyone to remember all the things they forgot over break. And that week often started with, or at some point included, your teachers’ attempt to get everyone back on track with the line, “Okay class, let’s review…”
Today, we’re going to review. There won’t be an exam or a term paper, or even any vocab words when we’re done, but we will cover some important details of our market over the past 12 months. So sit up straight, spit out your gum, and let’s get started!
First off, let’s review the number of sold residential properties over the past 14 years. Keep in mind that all statistics are taken from the Lynchburg MLS, which covers all of Lynchburg City and the four surrounding counties (as well as some additional properties beyond that scope).
This chart shows that 11 years ago our market peaked in terms of sales volume and then steadily dropped off for the following five years. The interesting thing is that in 2006/2007, most people did not sense the coming economic downturn, yet our market had already begun to slow down. You can also see that from 2012 through last year, we have made marked improvement. Higher sales is one indicator that the inventory is turning over at a faster pace.
Here’s another set of stats that I think are often over looked, but can provide great insight into the direction the market is heading: the number of expired and withdrawn listings. Every listing agreement has an expiration and sometimes when that date comes, the owners decide to take the house off the market (or maybe the market forces them to do so). Or, sometimes when a home doesn’t sell, the owners just ask to have their listing withdrawn. In either case, the bottom line is the home didn’t sell.
Take a look at 2006. That year, 2,998 homes sold and only 682 expired.
The very next year, when the market still appeared to be healthy, there was a dip in sales to 2,758 but the number of expired listings more than doubled to 1,747!
Seen another way, in 2006, for every one home that did NOT sell, 4.4 homes did. One year later, for every one home that expired, only 1.6 homes sold.
The gap continued to narrow over the following years until 2010 when it completely flipped upside down. That trend continued until 2014 when our market finally righted itself and for the first time in four years, more homes sold than expired or were withdrawn. Following the trend lines, it appears we are experiencing a continuing drop in the number of listings that do not sell.
This is all good news! Sure, it’s not like ‘winning the lottery’ good news, but it shows steady, positive movement in the right direction. This coming year, I’d like to see our market close over 3,000 residential sales and our expired/withdrawn listings drop to 1,500 or less. That would feel like two good, progressive steps in the right direction. Side note: While the average sales price and the average days on market are also interesting statistics, sometimes those numbers are more wisely applied to segments of our market. For instance, the average sales price across our entire market may show a change but that change may not apply to all price ranges or neighborhoods or zip codes. The figures we’ve discussed here give a broad view of the overall direction of our market as a whole.
Hopefully this is interesting and useful information to have, and maybe to share the next time you’re at a dinner party or social engagement. Hey, it has to be more fun than figuring the sine, cosine, and tangent, right? I’ll bet you already forgot how to do those…