Brick’s Blog

       If you saw me over the weekend and thought I had an extra bounce in my step, it wasn’t from an additional dose of Geritol. It was from having finally taken a look at the May numbers published by the Central Virginia Muliple Listing Service. Earlier in the month, I had predicted that May sales would put us 1/2 % behind 2006 numbers. I was wrong. When the final tally came in, it was deja vu all over again. (My apologies to Yogi Berra.) Single family sales for 2007 are 1 sale ahead of 2006’s number.

While I wish I did have the cavalier attitude of Alfred E. Newman and believe "what, me worry?", but I can’t because I am concerned. Our inventory levels are currently 16 % higher than the highest point in 2006. That’s about 1,500 homes, which is a entire month of absorption in the best months. As I mentioned earlier in the month, our inventory levels are 34 % higher than they were at the beginning of the year. There’s just too much for sale and sellers need to recognize this fact. That’s right, even old Brick will finally admit it - it’s a Buyer’s Market. 

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

     Oh, no …. not you, Brick. Say it ain’t so. Well, yes, I am afraid the doom and gloomers have finally gotten to even old optimistic Brick. May was not a great month. When Central Virginia Regional MLS reports its numbers in about a week, I am fairly confident the May 2007 units sold number will significantly lag its May 2006 counterpart. The net effect should be that 2007 year to date sales will be trailing 2006 sales by ½ %. While this may seem insignificant, please remember that through April 2007 sales were 3 % ahead of 2006 sales and keeping pace with the record year of 2005.

 

     So what’s going on out there, Brick? I wish I knew. The first half of May was very active and then it was like someone applied the brakes. I saw little activity for the second half of the month. Some of that I attributed to end of the year functions for schools, closing ceremonies for after school activities, and Memorial Day, but now we’re a week into June and I am seeing no increase in activity. Inventory levels continue to climb and are significantly higher than any point in 2006. From January 1^st to today, we’re up 34 % in inventory. Frankly, there is just too much choice out there for buyers and buyers have absolutely no motivation to make a decision. Daily I am seeing an increasing number of price reductions, greater incentives from builders and even lenders offering concessions. 

 

     Brick, you’re scaring me. Is there any good news out there? Absolutely!!!!!! Dollar per square foot on sales has increased all year. Sale prices have remained constant with little discounting. My list price/sale price ratio reveals discounting at under 2 % for the 5 municipal areas I cover. Million dollar sales are blowing away 2006’s record pace. Days on market, for what is selling, is unchanged.

 

     So what should we look for going forward, Brick? I believe we’re at the peak for inventory. I foresee inventory levels plummeting for the remainder of the year. As inventory levels are absorbed, there will be some additional discounting, but nothing significant. Maybe around 1% more. Those who have to sell, they will be punished the most. For you, bargain hunters, there are some incredible properties out there with attractive pricing. Be assured that whatever you buy today will be worth more a year from now.  

 

     Now more than anytime, buyers and sellers need the services of a seasoned agent. Pricing and marketing homes to sell is learned through experience. Don’t trust your largest asset to a green agent. For buyers, a skilled negotiator is crucial. Find one and listen to what he has to say.