First off, I will throw the graph at you and then discuss how I interpret the data and what seems to stick out as interesting. The statistics are from August 1, 2007 to August 31, 2007 and were retrieved by myself from the Columbus Board Of Realtors.
Please click the below graphs in order to view them at full size
So, you may be asking what in the world does this information mean? Well to be honest, I thought prior to doing the research, the statistics would produce more meaningful results, but who is to know before going in, right?
First, a little background on some terms. The "contingent" sale statistics I used in the research were based on "Contingent upon Financing & Inspection" clauses only. More likely than not homes in this category make it to closing and the home actually sells. Certainly, this is not always the case, as buyers and sellers often negotiate over the remedy solutions to a home inspection, and the more rare occassion (in my experience with clients) a person is not able to get a loan. I did not take into consideration homes listed as "Contingent upon the sale of another home" or similar clauses for a couple reasons. First, the time it takes for these homes to close is usually quite a long time longer than a standard closing. In addition, many of the homes contingent on the sale of another home do not make it to closing. I believe adding this into my research would skew the results, so I decided it would not be included.
First, a little background on some terms. The "contingent" sale statistics I used in the research were based on "Contingent upon Financing & Inspection" clauses only. More likely than not homes in this category make it to closing and the home actually sells. Certainly, this is not always the case, as buyers and sellers often negotiate over the remedy solutions to a home inspection, and the more rare occassion (in my experience with clients) a person is not able to get a loan. I did not take into consideration homes listed as "Contingent upon the sale of another home" or similar clauses for a couple reasons. First, the time it takes for these homes to close is usually quite a long time longer than a standard closing. In addition, many of the homes contingent on the sale of another home do not make it to closing. I believe adding this into my research would skew the results, so I decided it would not be included.
The term "Under Contract" simply means the home has passed all inspections, all clauses have been removed, and the home is set to go to closing. This is a more dependable indication a home will actually sell.
My take on the statistics involves looking at the percentage of homes sold in August compared to the number of current homes for sale on the market. Sure, there is a flaw to this method, as it only takes in consideration the percentage for the month of August, but it still should give more than just a "general idea." The numbers of homes sold per month changes quite drastically depending on the month in Central Ohio - under normal circumstances, the "hot" months for selling a home are May, June, July, and August. Naturally, when the kids are out of school. Following the end of August, there is typically a four to six week period where things tend to dry up, then back to normal again. Not normal as in the months of May to August, but a noticeable increase from September.
Once I calculated the percentage of homes sold in relation to the current homes on the market, I determined the number of months needed to exhaust the current inventory - assuming the August percentage remained constant. This revealed some significant differences in the local communities as well as at the county level.
Once I calculated the percentage of homes sold in relation to the current homes on the market, I determined the number of months needed to exhaust the current inventory - assuming the August percentage remained constant. This revealed some significant differences in the local communities as well as at the county level.
Powell, which under this study includes properties located within the Village of Powell seems to have had a tough month in August. Only 9% of the current listings sold. At that rate it would take a whopping 11 months to rid the inventory, not to mention the new listings sure to be added.
Worthington and Hilliard had good ratios, selling over 20 percent of their inventory, Worthington with a whopping 25.74% of its inventory.
The price of the home sales for the particular area were also interesting in comparison to the average listing price of the homes for sale. Please see the graph below and click to enlarge.
In my opinion, this shows some of the most troublesome data. The average price of the homes selling are significantly less than the average price of the homes currently on the market. A few things popped in my mind. People seem to be searching for bargains (no big surprise there!), the affluent buyer seems to be waiting things out before purchasing or they are not currently interested in purchasing a home, and current listing prices in many neighborhoods appear to be overpriced. The homes selling are the lower priced homes in each area. Once again, no big shocker. I suspect in the relatively near future, sellers will be dropping their listing prices quite a bit. At least those who have had their home on the market for quite some time.
The foreclosure sales have had a downward force on values because REO properties are a greater percentage than ever before. This has caused buyers to flock to these "bargain" properties. The homes that are selling are those under foreclosure/short sale or homes are forced to compete with them by lowering their price. In the past foreclosure sales were such a small segment of the market, it was not a driving force in the market, not causing values to be influenced or very little. However, in today's market, the percentage of short sales & foreclosures is at such a high rate, it is effecting all properties in order to compete.
The foreclosure sales have had a downward force on values because REO properties are a greater percentage than ever before. This has caused buyers to flock to these "bargain" properties. The homes that are selling are those under foreclosure/short sale or homes are forced to compete with them by lowering their price. In the past foreclosure sales were such a small segment of the market, it was not a driving force in the market, not causing values to be influenced or very little. However, in today's market, the percentage of short sales & foreclosures is at such a high rate, it is effecting all properties in order to compete.
The average home for sale within the Dublin city limits in August was $435,391. The average price of the homes sold in Dublin during August was $316,256 - only 72.64% of price of the homes currently on the market or a whopping $119,135 difference! Quite an astounding figure. The buyers in Dublin have been purchasing the lower priced homes, perhaps because they feel others are over-valued and perhaps (and this is a stretch) people with school age children were rushing to get into the Dublin School System during the month of August prior to the beginning of the school year. There are many homes in the $150,000 to $200,000 price range within Dublin Schools. The interesting fact is most of these are not located within the Dublin City Limits - they are in the City Of Columbus. The research I conducted only considered homes within the City of Dublin. So, the rushing in to take advantage of Dublin Schools in affordable housing was not the case.
Delaware County and New Albany faced similar circumstances in August. Dublin, New Albany, Delaware County, and Powell were the four areas having average listing prices over $300,000. Interestingly, Dublin, New Albany, and Delaware County (which includes Powell) were the areas facing the largest difference between the average selling price and average price of homes for sale. Delaware County's figures were not quite as drastic as Dublin, but still not typical for Central Ohio. The 77.05% (Average Selling Price/Average Current Listing Price) of Delaware County was the second lowest percentage, while New Albany faced the third lowest at 84.43%.
Central Ohio home buyers apparently are holding off purchasing some of the higher tier properties, while the more aggressive market has been in the more medium range market. In order to get their homes sold quickly, it seems a lot of sellers are in need of a price reduction in the Dublin, New Albany, and Delaware County areas.
The other areas I researched were actually not very far out of line with "normal" figures for local real estate. The average home in the Central Ohio area typically sells for approximately 95 to 97% of the listing price. Please realize this does not take into consideration the initial asking price of a home. Without a doubt, those numbers would drop slightly if calculated into the equation. Anything in the high 80's to 90% range, I would consider moving along pretty good in today's market. Powell, Hilliard, Worthington, Westerville, and the entire Franklin County (barely) fit my belief. Being a buyer's market, many home buyers are coming in with low offers and sellers are negotiating more than normal for our market area. This is not to say sellers are giving away properties. The average home sale has not decreased dramatically in Central Ohio, but there is certainly more competition to get a home sold, creating longer periods of time on the market.
Below are the statistics by area with respect to the average home sale price in August 2007 in comparison to the average current home listing price (as mentioned above).
- Dublin - 72.64%
- Powell - 93.65%
- Hilliard - 92.04%
- Worthington - 88.75%
- Westerville - 91.28%
- New Albany - 84.43%
- Franklin County - 86.50%
- Delaware County - 77.05%
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