Friday, May 16, 2008

Saline Real Estate market conditions for May 2008

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As you all know, I review our market statistics around the middle of each month. What I'd like to focus on this month is the overall strength of the market in, and around, Saline.

The first chart I’d like to review is shown below. I’ve tracked real estate activity for the Saline real estate market since 1996. There is a definite seasonality to the market – strength in the summer, weakness in the winter. A reading above 25% is a “seller’s” market, while a reading below 20% is a “buyer’s” market.

It’s no surprise to learn that we have been in a “buyer’s” market in Saline since the end of 2004 – more than three years, now.

What we see here in the middle of May, 2008, is a continued strengthening in the overall real estate market, going back to last October. The jump in strength from April to May is very encouraging, as we have reached a level unseen since the summer of 2005. So, the question to ask is “What could be the cause of this?”
This second chart (above) shows 2 lines. The top line shows the number of homes available for sale (listings) in the Saline area. The lower line shows the number of homes sold each month.

In answer to my question posed above (What could be the cause of this?), the strengthening of the Saline market since October is a direct result of fewer homes listed for sale. Each month, there are fewer and fewer homes for sale in the Saline market. How could this make the market stronger? Well, with fewer homes competing for the available buyers, it’s more likely that any of the homes listed for sale will actually sell during the month. That’s what we mean by a strengthening of the market!

Another interesting observation from the chart is that the number of sales in the Saline area has been rather consistent since 2005! In a previous post, we learned about the three "P's" that you control when you sell. The homes that are selling now, have been selling since 2005, are those that have consistency between the three "P's". Go back and check that post for a reminder.

The final piece of the analysis of the strength of the Saline real estate market is the months of supply of homes presently on the market.
This table shows the “raw data” that makes up the charts shown above. On the far right hand side of this table shows the “Months Supply” in each price range. Rather than focus on any particular price range, it’s more helpful to understand the overall level of inventory of homes for sale.

As of mid-May, at the present pace of sales of homes in Saline, there are enough homes on the market to supply about 10 months of demand. This is down significantly since February, when there was nearly a 20 months’ supply of homes for sale. In the past few years, it’s been typical to have about 6 months’ supply of homes for sale, so our market continues to improve toward our average.

If you're looking to sell in this market, take heart! Call me!

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