President's Perspective

It's inventory time!

When the going gets tough . . .

Chris Reese
President

You've probably noticed that we have a few more homes for sale this year, than last. As a matter of fact, as I write this, the March statistics are now showing a 25% increase in residential listings over last year at this time. You might also have noticed that builders have a large inventory of new spec homes available and they are offering a myriad of incentives both to REALTORS® and buyers. Yes, we have certainly moved into a buyer's market!

What does this all mean?

We have to adjust! We have to inform our sellers of the market and advise them to price their homes accordingly. The real estate market is similar to the stock market in that it doesn't matter how much a person has invested in stocks, the MARKET dictates what it is worth when it comes time to sell.

Look at the market statistics for the different areas you concentrate in to compare the competition and the selling time. Calculate the absorption rate. The higher the absorption rate, the greater the competition and the longer it may take the average property to sell.

To find this, divide the number of listings in the area by the number of sales during that month. I did this with the March statistics for the CBR market overall. We have 15,990 active residential listings (includes single family, condo & fee simple listings). In March we sold (closed) 2,344 listings. That's 15,990 divided by 2,344 or 6.82 months. That tells you that if there were no more new listings, it would take 6.82 months to sell all the current listings.

I thought it would be interesting to calculate this for some different areas. In Dublin, there were 292 active single family listings and 39 sales in March. That is a 7.4 month absorption rate. In New Albany, there were 162 single family homes, 10 solds which equals a 16.2 absorption rate. In southern Delaware County (D7, D8), the rate was 10.10 months. It is interesting that Downtown (area 10), the rate as 5.1. I find this to be a good tool to use when working with sellers to competitively price their home to sell.

Help your sellers get an edge on the competition. In this market, they need to have their homes in the BEST CONDITION possible. Since they are moving and YOU WILL SELL THEIR HOUSE, they might as well start packing and unclutter! They need to make their homes look like a model. If the home is not in top-notch condition, buyers will either buy something that is, or expect a price reduction. It is our job to inform them of what to do.

On the bright side, sales are up again! Our central Ohio area saw 9.5% more sales in March than last year. The greatest number of sales occurred in the $100,000 to $160,000 and $200,000 to $250,000 price ranges. That tells us that the first time buyer market and the direct move-up market are both very strong.

Our home pricing in Columbus is still very affordable for buyers. We constantly have buyers coming into our town, and buyers moving around our town. We have many businesses, corporate headquarters, plants, etc. located here. We are the Capital City, the home of OSU, Batelle, Limited, Abercrombie & Fitch, Wendys, Worthington Industries, Nationwide, Annheiser Busch and so on.

We, as REALTORS® always seem to adjust. We have a great market in Columbus to adjust to, and are very blessed to sell real estate here. We need to remember to be pro-active & stay on top of market conditions.

When going gets tough - the tough get going!