To fully understand the market, there are several economic indicators you should study. However, one simple, but effective method I like to use is analyzing the housing trends. I typically go back 5 years to get a good feel of where the market has been and where it looks like it is going. Below are some key stats for Single Family Homes in Greenville County, SC starting in 2005 and ending in 2010 (all stats provided by the Multiple Listing Service of the Greater Greenville Association of Realtors).
2005 2006 2007 2008 2009 2010
Total Listed 14,496 16,016 17,606 16,435 14,226 14,592
Number Sold 8,682 9,511 9,240 7,426 6,285 6,028
Pct Sold 59.89% 59.38% 52.48% 45.18% 44.18% 41.31%
Avg. List Price $180,389 $187,467 $194,778 $193,527 $175,120 $183,276
Avg. Sale Price $175,497 $182,435 $188,967 $186,313 $167,326 $174,080
Sale $/List $ Ratio 97.29% 97.32% 97.02% 96.27% 95.55% 94.98%
Avg. DOM 95 83 83 89 100 99
Pct. Expired 20.14% 15.87% 16.70% 20.78% 27.34% 26.76%
These statistics clearly show the bursting of the housing bubble in 2007, but they also show the green shoots of recovery that began in 2009. It is too early to draw any definite conclusions, but the signs are positive. The one area for concern is the “number of homes sold”. You can see that the number has consistently fallen since 2007. That trend slowed in 2010 and should reverse in 2011, but I will be keeping an eye on it. The main factors that will affect recovery will be mortgage rates, employment, and affordability of homes. As long as mortgage rates stay low, unemployment shrinks, and home prices remain affordable the recovery has a decent chance of continuing.
Disclaimer – The conclusions drawn in this article are the opinions of the author and should not be viewed as a complete or accurate prediction of the real estate market.
