It's an interesting climate in which to begin a blog. The country's in meltdown (or it isn't), the bailout has to happen NOW (or not at all), nobody will ever get a home loan again (or that's nonsense)... who and what are we to believe?
I've got a philosophy of keeping my eye on the local market and basing my beliefs and my business on what's happening here. If I listened only to the national news, I might pack a shopping cart (Rosie would fit nicely in the top seat) and look for the nearest bridge. But I can look at the statistics and recognize that yes, the real estate business is different this year but it isn't on life support. And it needed to be different. The craziness of the last few years couldn't continue. This correction will settle things down and bring us back to a normal market.
Let's look at those statistics. All the following apply to MLS statistics for residential sales for the areas of Albemarle County and the city of Charlottesville:
Year # Sales Avg. List Avg. Sale % Sell/List Avg. DOM Avg. Curr. Inventory Months Inventory
2005 2528 $392,113 $384,565 98.08% 54.7 758 3.88
2006 2443 $404,811 $393,926 97.31% 70.6 1,377 7.65
2007 2080 $384,953 $373,349 96.99% 92.3 1,486 9.51
2008 1279 $425,074 $402,591 94.71% 115.1 1,487 11.64
Notes: 2008 stats are through September. The Avg. Current Inventory column reflects the number of active listings on the market on the 16th day of each month. The Months of Inventory column is equal to the Current Inventory divided by the Monthly Sales. This reflects how many months it would take to sell out of inventory at the current rate of sales.
And that's where the story is told. From under 4 months of inventory in 2005 to nearly a year's worth right now and of course the market seems to be moving at a snail's pace. Sellers are anxious but may have difficulty accepting reality, buyers are paralyzed (what if today's purchase is worth less tomorrow?) and the current credit mess doesn't help. But this will resolve, the world will begin to turn again and the pendulum will settle down. It's hard to know what to do right now, so my approach is to get up every morning and go to work, do my business, focus on my clients and do the next right thing. It's all I can do.
What about you?