The RMLS stats for the 13 county metro area are almost complete for this year. We've only got 2 weeks left to make any changes in the total sales for the year 2006. There will be some additional sales to make the figures at right look a little better, but realistically the impact of the next few days will be minimal. The purple bars in the chart show the pending sales for each of the listed years. The interesting thing to note is that our number of transactions is close to what it was in 2000. The year 2000 was the very beginning of the "feeding frenzy" when houses had multiple offers and sellers could ask any price they wanted for their homes. The frenzy lasted about 5 years ending in October/November, 2005, when agents experienced an abrupt cut in showing requests and sales.
In comparing the number of sales from today with the pre-frenzy figures, there are two important differences. The first is that there are many more houses listed today than in 2000 which makes the competition between sellers fierce. The second difference is not reflected in the chart. That difference is the dollar volume in the sales before the frenzy as compared to today. In 2000 the median price of a home was $152,000, and the average sales price for a home was $181,605. Today the median price is $230,200 and the average sales price for a home is $272,522! Even though the number of houses sold is similar, the dollar volume of the total sales is much higher today.
From a seller's perspective some of this is depressing news. It means the odds are higher against a seller finding a buyer for their home than in 2000. It also means, prices have to be reduced (but not to pre-frenzy prices!) to attract buyers to the home. It also means, sellers are having to give "concessions" or incentives to get buyers to look. Incentives range from paying the buyer's closing costs to giving a car or flat screen TV with the sale.
From the buyer's perspective? Whoopee! It's time to buy because there are lots of choices, price reductions, and "bennies" going with a purchase agreement! The balance offered the miserable sellers is that the house they are going to buy will have the same benefits for them!
Figures in the chart are based on information from the REGIONAL MULTIPLE LISTING SERVICE OF MINNESOTA, INC for the period January 1, 2000, through November 30, 2006.
(c) Bonnie Erickson 2006
Thanks, Maureen. I give all the credit to Excel spread sheets!
Posted by: Bonnie Erickson | December 19, 2006 at 10:09 AM
Nice graph... I came to read Jonathan but I was lured away by your graph.
Posted by: Maureen McCabe | December 19, 2006 at 06:08 AM