Brick’s Blog

     One of the great things about my job is that I am out and about in the community all day. Here’s a picture I snapped the other day. I was traveling from Broad Street to Hungary Road on West End drive when I saw Santa kneeling at a manger. I drove on for a few blocks before I decided to circle back and take the picture. It was then that I noticed the "Jesus is the Reason for the Season" signs that were posted, too.

     I am still pondering this scene. After all, it did make me stop. At some point during the "season", the family and I will be making our annual pilgrimage on the "Tacky Christmas Light Tour."  Maybe, I need to see this at night. I’ll let you know when I do!

         As you should know by now, I report market conditions monthly for the Greater Richmond area to Realty Times. Here are my comments for November:

            Hemlock? Cyanide? Maybe, I’ll just go under the kitchen sink and find the Drano. Yep, November numbers are in and they ain’t pretty. November ’07 versus November  ’06 is down a whopping 21 %. This is the largest monthly decline all year; and remember we have had a declining ’07 month to ’06 month since April of this year. In retrospect, it is hard to believe that through the first quarter of 2007 our market was ahead of 2006 and was challenging the record year of 2005. What a difference 8 months makes. So, Brick, old boy, are there are any good elements in the market?

 

Yes, our inventory levels decreased again. Down about 3 % and considering sales were down 7 % from October, it is amazing any dent was made in the excess inventory out there. Discounting remains flat – the biggest discount is being seen in the Fan and Museum Area at about 5 %. The suburban areas are seeing discounting at less than 3 %. Days on market inched up slightly adding about a day across the metro Richmond area. Median sales prices were down across the board in November for the greater Richmond area, but this is more a product from the majority of sales (69 %) were under $300,000 and million dollar sales hit their lowest monthly number all year. Dollar per square foot cost remained constant, while the average sales price for the year is still up over 4 % above 2006’s average sale. See, there are some bright spots to the market.

 

Having spent the afternoon rubbing my crystal ball, reading my tea leaves and consulting my Quija board, I am adjusting my 2007 projections slightly. I had been predicting for several months that I anticipated about a 10 % decline in single family home units sold in ’07 versus 06’. I am adjusting that number up to 11 %, which would project single family home sales for the year to be slightly more than 14,000 or about 1,700 under 2006. Just to put some perspective on how significantly a decline this is in the market, if I use the average sales price for 2006 and multiply it by the 1,700 unit decrease the Richmond area experiences a loss of $450,000,000 in single family home sales. In addition, condominium/townhome sales for 2007 are tracking towards a 13 % decline versus 2006 removing another approximate $48,000,000 in sales. Do I have your attention now?

 

So, we have had about a $500,000,000 downturn in the Richmond Real Estate Market from last year. Boy, it must be bad out there, Brick. Does anybody have a job? Everyone you know must have a sub-prime mortgage. Is everyone’s IRA at risk? It must have really been good back during the first 3 months of 2007 for the Richmond market to be so bad now. Oh, it was great during the 1^st quarter of 2007. Local unemployment was between 3.1 % to 3.3 %. You could get a 30 year fixed mortgage with a rate between 6.16 % and 6.34%. And the Dow – it finished the 1^st quarter at 12,354 and had been as high as 12,786. Just look at how bad things are now – the Dow finished yesterday at 13,623, local unemployment is at 3 %, and 30 year fixed mortgages are under 6 %. Can you believe it – now, wait a minute all the current numbers are better than at anytime during the 1^st quarter. How can that be?

 

And, that is the $64,000 question. Think about it.

 

For buyers, either entering the market for the first time or who have their existing home under contract, welcome to a true BUYERS’ MARKET. The selection of properties is simply UNBELIEVABLE. “MUST SELL” situations are everywhere and some of the best deals in years will be had over the next few months. So call me, let’s go find one of those incredible bargains while we can. You don’t want to be “an I wish I had” when everyone wakes up to the true situation out there. Turn your TV’s off, don’t listen to the radio, don’t read the newspapers and just go visit a mall; provided you can find a place to park. Now, doesn’t that tell you something more than anything you’re hearing from the media?

         The market continues to be bottom driven with almost 69 % of November sales occuring below $300,000. Actually, November was closer in line to the year to date 66.92 % of sales at below the $300,000 benchmark, after both September and October had run closer to 70 %. Here’s November’s numbers followed by the year to date statistics.

     Here’s my monthly post on sales activity for various areas in the metro area. If you’d like to see a particular area covered in the future, please comment on the area. If there is enough sales activity for that area monthly, it will be added. Please remember that these sales are compiled from Central Virginia Regional Multiple Listing Service, and therefore, only include sales involving a Realtor. My market condition comments will follow in the next few days. Considering the continual and relentless negative drumbeat from the the media, I am encouraged by November’s numbers!