Brick’s Blog

     As I suspected earlier in the month when I reported Market Conditions for April 2007,  a slight slip in sales now has 2007 lagging record 2005 sales by approximate 1.5 % in total homes sold. 2007 still leads 2006 by 2.9 %. And for all you Chicken Littles who continue to listen to the media with their doom and gloom stories on the housing market, here’s a dose of reality. If you bought your home in 2005, it is now worth a whopping 23.5 % more. If you bought it in 2006 at height of the "supposed" pending crash, it is now worth 4.3 % more. Kinda of explains why your local muncipalties continue to raise your assessments, while doing the old sleight of hand by lowering the real estate tax rate. Compliments of Central Virginia Multiple Listing Services are the following numbers: 

Yesterday, I was taking a continuing education requirement at the Board of Realtors and overheard numerous agents bemoaning the market. As I have stated many times our current market is reminiscent of the mid 90’s when we oldtimers thought we had a good market. Despite what you might hear, we have one now, too. 

     I report monthly market conditions to Realty Times. Here are my comments for April:

     Well, what do you want first – the good news or the bad news? Bad news. Okay, here it is. The doom and gloomers succeeded here in April. When the final numbers come in a about a week, my preliminary numbers indicate April 2007 sales might surpass April 2006, but certainly won’t equal April 2005. For the first third of the year, total sales in 2007 will still be ahead of 2006, but probably lagging 2005. Sometime after the 20^th, I’ll blog the exact numbers, so stay tune. 

 

     So what’s the good news? Days on market was down across the board for the 5 localities I report on and cover. Dollar per square foot on sales was steady as a rock and continuing to increase in all areas. Sales Price to List Price ratio was almost non-existent. The largest discount was in Glen Allen at 2.1 %. The other 4 areas were closer to 1 %. Million dollar sales are blowing away last year’s record number pace and we’re only a third of the way through 2007.

 

     Brick, that cannot be all the bad news, what else aren’t you telling us? Okay, fair enough. Here it is. If the market is glutted anywhere, it is between $700,000 and $1,000,000. Two years ago, I would have called this the top of the market. It’s not anymore. Our million dollar sales monthly are almost exceeding all the sales in this range. If you’re a Seller in this range, you’re probably frustrated as you watch many million dollars sales sell with a premium. Yes, there are still competing bids on homes in the Richmond market and it is occurring at the highest rung of the ladder. Obviously, the wealthiest segment of the market isn’t concerned about a housing bubble, since there have been numerous sales with 10 % plus premiums.

 

     With the increased inventory levels, Buyers continue to enjoy multiple choices and the freedom to make their decision at their own pace. For Sellers, the increased days on market, are simply a product of the higher inventory levels. I have been telling my Sellers our current market is reminiscent of our mid 90’s market where we old timers all thought we had a good market that was in equilibrium. Nowadays, we have twice as many agents with the majority having entered the business since the recent boom times. With no perspective and even less experience, these newbies are the first to bemoan the current market not knowing what an equilibrium market is like. Trust me, the Richmond Real Estate market is not too hot, and not too cold, but just right. My apologies to Goldilocks! So remember Brick’s mantra - Whenever you hear, see, or read anything about the state or national housing market, I want you to envision a blinking red disclaimer of “DOES NOT APPLY TO THE RICHMOND REAL ESTATE MARKET” scrolling across your mind.