You might hear that terminology from time to time. For me, that term goes nicely with the 2007 year end listing and sales report that I'm about to share.
For the last year and a half... I have been reading, hearing, and seeing people talk about the real estate market and of Realtors... most of what I'm privy to is not complimentary. Depending on who you believe, Realtors were the cause of the the deflating housing market. Realtors got the whole country into 'this' mess. Realtors lie and are willing to say anything, by any means necessary, to ensure that when a home sells -- a 6% commission of the sale flows into the greedy pockets of agents and brokers everywhere. Bottom line, Realtors will say anything to paint a rosy picture of what is happening in the market... well... that is what the critics offer.
Hmm... I'm willing to bet that this year end report flies in the face of the critics. I am a Realtor and I have been offering data on a consistent basis... raw data... no frills data... it is what it is. Most of it has not been pretty... all of it has been honest... and yes I'd love to sell a few more units a year to line my greedy pockets with funds from negotiated agreements I have with my clients.
But I see the data and know what I'm in for as a professional in this industry and when you see the following charts... you should be able to come to the same kind of conclusion that I have.
But first... the disclaimer...
Disclaimer... all data compiled for this report comes from the WARDEX Data Exchange and does not include any sales activity from outside that resource. All research is done only on single family homes and there is no inclusion of modular homes, commercial properties, or vacant land. The geographical area researched includes; all areas within the boundaries of the city of Kingman, north Kingman, the Hualapai Mountain area, and the Valle Vista subdivisions. Click here to see maps of the included area's.
Where oh, where should I begin?? Listings or sales?? Alright... listings it is...
2007 Listing Activity Report:
In total, there were 1,563 listings that hit the market as reported by WARDEX in my research area. Folks, when I was telling you all year long that sellers were outnumbering buyers by a wide margin I had no idea how this chart would look like when all was said and done for 2007. As you can see of the 1,563 listings taken last year, only 22% (or 340 units) successfully attracted a buyer and transferred ownership.If you want to equate that to baseball terms... batting .220 in the major leagues usually means sitting on the bench or getting shipped back to the minor leagues. Our market certainly was not a rising star in 2007... it was merely a bench player or minor leaguer at best.
35% of the listings taken last year are still on the market. 38% of the sellers that tried their hand in the real estate sales market either quit (withdrawn listings) or let the listing period lapse (expired listings) and saw no positive results. If you factor in the 2% of sellers that have at least 'temporarily' pulled their listing from the active market you will see a total of 40% of the sellers probably learned that the competition was too stiff last year.
If we removed the withdrawn, expired, and temporarily off the market listings from the data, then we would see that 41% of the listings taken in 2007 have achieved success. Folks those are all-star numbers if we are using a baseball analogy. In fact Hall of Fame numbers. This was not reality though... just wishful thinking.
Quite simply the listing market was extremely bloated in 2007. Lot's of choices for buyers, plenty of opportunity to simply wait for the best deal... and all the while sellers were slow to react... well at least 40% of them were.
For the hopeful sellers in 2008, you should definitely get an in depth market report before you put your home on the market. You must understand the competition that you will face and be prepared to price your home to the current market. Gone are the days when your home will sell for more than your neighbors did 6 months ago... even though your home is much nicer and has all the upgrades, bells, and whistles. Gone are those days until some balance comes back to the market. Sellers can affect the balance in the market and it is all in the numbers.
2007 Sales Activity Report:
See a trend in the charts above?? Sales in units were off a whopping 37% from the previous year. The total dollar volume of business was off even more... down 40% (est.).
That is nothing as compared to how far the market has fallen compared to 2005 (59% in units sold and 52% in dollar volume). We have been told that 2005 was the best year ever for real estate sales and when you have the all time best in anything, often what follows a command performance is a lack luster effort. I'm sure there is some 'spin' out there that will say that 2007 was in the top ten performing years of all time... but home sellers and real estate professionals won't be impressed.
So how did the average sales stack up against previous years?? I'm glad you asked...
What?? Down only 1.9%?? If you were one of the lucky sellers this last year you probably made it out without too many scratches or other types of flesh wounds... especially if you bought the home originally before 2006.
Now I'm not too familiar with a failing market, but I'm guessing this kind of data above lags the data in the other two charts by a year or so. Maybe I'm wrong, I'm just basing that on how this data lagged when the market was going the other direction.
How far will prices drop?? Where will it stop?? Dudes and dudette's... I do not have those kinds of mental powers to make that kind of determination. There is a new movie coming out (or is out... we don't have a movie theater in Kingman at the moment) called 'There Will Be Blood" and while the movie looks good (I'm sure I'll see it when it comes out on dvd), the title may be a little harsh for the upcoming market but many may think it will feel like that.
If you are thinking of selling in 2008, make sure you get all the data you can get your hands on before placing a sign in the front yard. Marketing your home in a quick fashion should be the goal and appealing to buyers, for the time being, will mean a price tag that screams 'GREAT DEAL' today... but keep in mind that it may not scream that in 30 to 60 days.
There will be many tough choices to make in 2008... the easiest of the toughest choices may be to not sell your home. I hope and pray that you don't find yourself in a situation where this option isn't available.
Looking back, it appears we are at least 24 months into this 'slide' down in the market. If some sense of balance can be achieved this year between buyers and sellers then I believe we would be making progress towards recovery.
Of course there are other factors at play here, but I'm only focusing on the local market. The sub-prime meltdown, the banking and credit fiasco, and the government intervention are things that none of us have control of. Sorting that stuff out is for someone else.
If we see a better sense of balance between the number of buyers and sellers in 2008, then this report next year will be plenty easier to write. Be sure to check back throughout the year for the monthly updates. Good luck and fortune to all.
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