Steve's Stat's - February 2018
STEVE'S STAT'S FOR FEBRUARY 2018
"How's the market?" That's the number 1 question everyone who works in real estate is asked. What separates good real estate agents from the rest is their ability to answer this question accurately, thoroughly and honestly. When making decisions about your most important investment you want to know that the people you are working with know what they are doing and have a proven track record.
The ABSORPTION RATE is a measure that determines how quickly it will take to sell through the current inventory of homes for sale given current sales activity. This measure indicates whether the market is one which favors the seller (seller's market) or one which favors the buyer (buyers market).
(A) = Active listings - Shippensburg school district: 99
Houses sold in Shippensburg in the period used (3 months) : 63
(PD) = 63/3 = 21
(R) = Absorption Rate (measured in months) = A/PD = 4.71 months
The Absorption rate is a measure which indicates how long it will take to sell through current housing inventory levels given the current and most recent sales pace. It is widely accepted that 6 months is a balanced market. Any measure above 6 months would indicate a market which favors the buyer meaning lower sales prices and more marketing time due to higher levels of inventory. Any measure below 6 months indicates a seller's market which can be characterized by lower levels of inventory and higher sales prices. All of this is based on supply and demand economics.
Looking at the sales data over the past 31 days:
Number of homes sold = 11
Median Sales Price = $188,623
Average Days on Market (for the 11 houses that sold) = 67 days
IF YOU NEED TO SELL HERE IS WHAT YOU NEED TO KNOW
Inventory of houses being offered for sale is low and buyer demand is high. This situation favors the seller and will result in the highest sales price and the shortest amount of marketing time. Of the 11 houses in January 2018 that sold in Shippensburg, 36% of that business went through JALEX. The median sales price of those sold houses was higher than the median annual sales price of Shippensburg houses that sell which was about $164,000 in 2017. The number of days on the market for those houses that sold in January was 67, just over 2 months. Normally the average number of days on the market for houses that sell in Shippensburg is 4 months.
There are two main issues affecting local inventory levels; first, interest rates have been so low for so long that many purchased or re-financed and obtained a very low mortgage rate. With the recent increase in mortgage interest rates purchasing that "move-up" home with a higher price and interest rate will result in a higher cost. The second issue affecting inventory right now is the lack of housing inventory. Right now there are sellers who would sell if they knew where they were moving. That is what I call shadow inventory. Houses we may be able to sell if that seller knew what they would sell for and could locate their next home. Remember, the settlement date of your house is a negotiable term. The seller may not always know where they are moving to when they put their house on the market but can inform a buyer that the sale is contingent on them finding their new home.
IF YOU ARE BUYING HERE IS WHAT YOU NEED TO KNOW
If you need to buy you need to know that making good offers is more important now than it has been since the mid 2000's. Good offers include pre-approval letters from local, reputable lenders. Good offers are not overly contingent offers. Good offers are written to be accepted, not rejected or negotiated. With inventory levels as low as we have right now when a house in good condition is listed for a fair price you better believe that you are not the only buyer interested in owning that house. If you want to purchase the house then your offer needs to be more than competitive, it needs to be compelling!
You also need an agent helping you to find houses for sale now more than ever. If you are searching on Zillow, Trulia, Realtor.com, Facebook, etc for houses for sale and you find one you like...it's too late! Your agent should be an expert in the market that you are looking in.
Broker, Owner, Real Estate Agent
JALEX Real Estate Services
717-552-8340 Cell Phone-text | firstname.lastname@example.org