Sales malaise still affecting Fayette County in November Listing Performance Review

Tue, 12/11/2007 - 11:24am
By: The Citizen

By Chuck Fister, REALTOR
Special to The Citizen

Last month in The Citizen, I reported that calendar-year 2007 sales of Fayette County single-family listings peaked in June at 204 listings sold. I also observed that, by October, sales had fallen dramatically to 111 listings sold; a 45.6% decrease from the June peak. With another month of data now analyzed, it is apparent that the sales malaise affecting Fayette County listings continued through November with only 92 listings sold.

November sales fell 17.1% below October’s already poor performance. The compounded effect of this continuing sales falloff is that November sold listings varied from the June high by a negative factor of 54.9%. November now holds the 2007 record for the lowest number of listings sold, with two less sales than February. The source for the following data analysis is the Georgia Multiple Listing Service (MLS) and all data is as reported on Dec. 1.

Listings available for sale as of Dec. 1 totaled 1,487. This is the total of active listings plus listings under-contract (which are considered available for sale until they close in a sale transaction). Per my June 1 report, total listings peaked at 1,752. December 1st total listings have fallen from the June 1 high by a negative factor of 15.1%.

Listings under-contract as of December 1 totaled 137. This performance metric is an improvement over November 1st when there were 6.2% less listings under-contract. However, this improvement still continues a downward trend from the June 1 peak of 249 listings under-contract. The December 1 variance from the June 1 high is a negative factor of 45.0%. Under-contract listings also include those contracts that are contingent upon the sale of a buyer’s house, but are subject to a “kick-out” clause.

“Absorption Rate” is a measurement of the percentage of total listings that are sold. The rate is derived by dividing the total listings available on the first day of a month by the listings sold during the entire month. Not surprisingly, the month with the highest average absorption rate was June at 11.6%. Because of its abysmal sales rate, November had an average absorption rate of 5.9%; a variance from June of 49.0%.

The “Sold Success Rate” was the subject of my Sept. 12, 2007 article published in The Citizen in which I discussed strategies to avoid sales agreement failure. Simply stated, the Sold Success Rate is the percentage of listings that are under-contract on the 1st day of the month that close in a sale by the last day of the same month. Because closings are subject to various timing and situational vagaries, closing rates vary widely from month to month.

Sellers should keep in mind that, since this closing ratio metric measures success, the inverse of the closing ratio measures failure. Therefore, the Sold Success Rate also alludes to market problems that fall into two basic categories: (1) failures to close because of issues beyond the buyer’s control, such as financing and appraisal failures; and (2) failures to close because of factors within a buyer’s control, such as buyer’s remorse. Whatever the reasons, the average Sold Success Rate peaked in June 2007 at 81.9% and has fallen steadily to November when the average rate was 71.3%.

From a consumer’s perspective, one of the most important metrics I track answers the question: “How long will it take for my house to sell?” These metrics measure the months of inventory of total listings currently on the market. For this report I compiled a weighted-average months-of-inventory. Although this is a highly subjective analysis, the underlying metrics all point to an increase in inventory for the upcoming months; if total listings remain near their current level and sales continue to fall.

The best overall month in 2007 for seller expectations was July with an average of 10 months of inventory. That metric was highly influenced by the success of June sales and high closure rates during the period. Contrast that to Dec. 1. There are now an average of 14 months of total listings inventory on the market; a 40% increase in the expected sales period over the July factor.

The expected time on market varies, depending on listing price range. As of Dec. 1 there was a weighted-average of eight months inventory of unsold listings priced less than $200,000. Similarly, there was a 13-month inventory of unsold listings priced between $200,000 and $300,000. Listings priced between $300,000 and $400,000 have a 18-month inventory of unsold listings. Listings priced between $400,000 and $500,000 have a 16-month inventory of unsold listings. Listings priced above $500,000 have a 29-month inventory of unsold listings.

If you have any questions or comments about this article or would like a copy of my data analysis and listing performance evaluations for Fayette County, Coweta County, Clayton County or Henry County, please call or email me. If you need specific market information, please call and I will attempt to accommodate you. All of my articles are available on request.

Chuck Fister, REALTOR

Direct: (678) 587-3425

Chuck Fister is a REALTOR, real estate consultant and sales agent with Metro Brokers/GMAC Real Estate and works out of their Peachtree City Office.

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