An associate of ours has kept a speadsheet for the past few years keeping track of some critical numbers for the MLS - number of homes on the market, average number of weekly sales, etc, etc. We have fallen out of contact with this realtor and so have not had ready access to his spreadsheet -- but we reconnected today and the news is remarkable.
Anecdotally, we have noticed an uptick in activity the last few months, and so have many of our fellow realtors, title offices, mortage people, etc. It hasn't been universal, but more folks than not say they see improvement. With these new numbers, I see why.
If you take the total number of single-family homes for sale and divide by the average number of sales per week, you have, theoretically, the number of weeks it would take to sell all the existing inventory if no new homes came on the market.
We call this weeks of inventory on hand. It's a useful number because it nicely captures two big elements of the market's strength: amount of product on the market and the velocity at which it is selling.
A healthy market is generally 25-30 weeks of inventory. When our market was overheating in 2004-2005, we saw as few as 12 weeks of inventory at one point. After the bubble popped in late 2005, the weeks of inventory on hand shot up. We've watched it for the past 2 1/2 years and prayed for the day when it would trend back down!
The peak was about 140 weeks (!) early this year. But the past three months have seen a strong downward trend, to just over 80 weeks now. That's still a big number but it's the lowest we've seen in almost 2 years, and headed in the right direction.
Would it jinx the whole thing to breathe a big old sigh of relief?
One way to track foreclosures is in number of new foreclosures filed, but that can be misleading. A really huge county with a lot of homes will of course have a larger number of foreclosures, but that isn't a fair comparison next to, say, a smaller county that had fewer homes to begin with.
So we use the number of foreclosure filings as a percentage of total homes in the area. For example, for the first four months of 2008, Florida had a rate 2.56%. That put us #3 in the nation, by the way, behind Arizona at #2 and Nevada at #1. California is behind Florida in the #4 spot.
Within Florida, Sarasota is at 2.58%, or 12th in the state of Florida. Want to guess where #1 was? Osceola County (the towns of Kissimmee-St Cloud).
In Sarasota, there was a headline in March that foreclosures were down, and that was true ... January saw 800 filings, February just 700. Then again, March was 1068, and April was 1300.
Is there good news in this? I'll spare you the (probably meaningless) analysis. I personally was glad to see that Sarasota was right at the average for Florida, and not way in front with many more foreclosures. And it's good not to be #1 or #2 in the nation in this particular case -- AZ and NV can have that disctinction. Beyond that emotional reaction, we don't have a crystal ball and don't believe that anyone else does either. We're going to keep our heads up, and keep making the best of it. Our business activity, is way up, by the way, since we stopped reading the newspaper on a daily basis -- it really is possible to live without a regular dose of gloom-and-doom. Go figure!
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My husband Preston Larus and I are residential Realtors with Keller Williams Realty, serving Sarasota & Manatee counties (that's on the west coast of Florida roughly 40 minutes south of Tampa Bay
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