MLS Numbers Tomorrow
In the next couple posts I am going to look at the state of the real estate market, both nationally and from the Charleston MLS. First, let’s look at the Existing Home Sales Report for October from the National Association of Realtors:
This graph compares monthly sales over the course of the year, and by looking at the graph, you can see the sales numbers dipped slightly, about 1.8%.
If you have seen the news reports, chances are you have seen a mixed bag of opinions of what this means to the real estate market overall. Of course, there were the inevitable chicken little reactions:
Surely many media outlets reported this as bad news, and impending doom. But I prefer to dog a little deeper to find the entire picture so that you can make an informed conclusion of what is going on.
There are other reports that get overlooked that paint the entire picture, and it is too common for these to be overlooked. It is much easier to simply look at the numbers and draw your conclusions.
Another important piece of the overall puzzle is to look at the Pending Sales Report—this shows the number of homes under contract.
This is important because this report will basically predict what the Existing Home Sales Report will look like about 60 days from now.
That is because homes under contract will typically take 30-60 days to close, at which point they will appear on the Existing Report.
Of course, not all homes under contract will wind up closing, so by no means am I saying that the Existing Sales Report will look exactly like the Pending Report did 2 months ago.
However, it is a good indicator and the two reports do tend to mirror each other. You can see that by looking at the current Pending Home Sales Report:
As you can see, a couple months back there was a dip in Pending Sales, which is reflected in the current Existing Sales Report.
However, there was then a sharp increase. Interesting to note that there has been another slight drop as we head into year’s end.
That could be explained possibly by the fact that at years end sales tend to drop.
This is typically attributed to the Holiday Season, and the fact that the weather in many parts of the country progressively gets worse–two reasons many people do not want to make a move at that time of the year.
However, at this point, I believe that is a little premature. That would be more of a “the sky is falling”, knee-jerk reaction.
In fact, even if this slight downturn were to continue, it wouldn’t be completely abnormal. In fact, according to NAR, sales typically dip towards year end.
The graph on the right shows the average drop in sales numbers for each month as compared to August over the last 15 years.
Another report that impacts the Existing Sales Report is the Foot Traffic Indicator. This report shows the amount of people out looking at homes right now. This metric gives us an idea of what future sales will be:
As you can see, going back a few months Foot Traffic decreased, which is reflected in the most recent Sales Report.
However, in the most recent two months, the Foot Traffic numbers have risen sharply. This is another good indicator for the next couple months.
In fact, based on the Pending Report and Foot Traffic Indicator, this Fall/Winter season actually look like they will be very strong. The winter could possibly be the best in the last decade according to these numbers. Of course, time will tell.
However, by looking a little deeper at the numbers and also examining the numbers that go into making up the Existing Home Sales Report, you get a better overall picture. It’s not quite looking into the crystal ball, but it is certainly a better, more logical approach than what is often reported in the media.
Charleston MLS Numbers Tomorrow
Tomorrow I will look at the numbers locally, from the Charleston MLS and see how they compare with the national numbers.
What do you think about the current real estate market? Where do you think it is heading? Do you agree or disagree with what these reports indicate? Sound off, then! Leave some comments and feedback!
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