By Chuck Fister
Realtor and GA Real
Property Appraiser
Special to The Citizen

Throughout 2007 I have tracked and reported to you through The Citizen the performance of Fayette County single family listings. Now that we are in a new calendar year and looking hopefully forward to a rebound in sales, it is an appropriate time to take an analytical look at 2007.

The source of my data is the Georgia Multiple Listing Service (MLS). Looking back at the Fayette County sales metrics for the ten-year period ending 2007 it is now apparent that single family listings sold in 2007 at the lowest reported rate since 1998. The MLS reports that 1,553 listings sold in 2007 compared to 1,901 in 1998. The following details the listings reported sold for Fayette County in the MLS system over the 10 year period.

1998 = 1,901 listings sold
1999 = 1,929 listings sold
2000 = 1,692 listings sold
2001 = 1,647 listings sold
2002 = 1,704 listings sold
2003 = 1,776 listings sold
2004 = 1,946 listings sold
2005 = 2,107 listings sold
2006 = 2,014 listings sold
2007 = 1,553 listings sold

These metrics show that, after 1998, sales peaked in 1999 before falling to a trough in 2001. The total loss in sales from the 1999 peak to the 2001 trough was significant at 14.6%. 2002 marked the beginning of a four-year growth period that accelerated through 2004, but began to slow and peaked in 2005. However, sales during this period only appear to have returned to the 1999 high plus a 9.2% overall increase. This increase amounts to slightly less than a 1.5% compounded annual growth rate over the six-year period 1999 to 2005. Statistically this would be a relatively low growth rate in sales.

2006 registered a 4.4% decrease in sales from the 2005 peak as sales growth crested and started to decline. The high growth rate years prior to 2006 are the period that is often spoken of as being a super-heated national real estate market. The sales performance during that period was also said to have been unsustainable, and 2006 was viewed as a market “correction”.

Obviously, 2006 sales performance was not sustainable. 2006 proved to be a watershed event and the precursor of tough times for Fayette real estate sales. In 2007 sales fell 22.9% from 2006 and registered a total sales falloff of 26.3% from the peak year 2005. As I noted above, 2007 sales were lower than in 1998. The total sales falloff from 1998 is 18.3%.
Sales for December 2007 and January 2008 are tracking at about 27.5% less than the one-year ago period. This performance would appear to indicate a further weakening in sales for 2008 – at least in the near term.

With sales falling since 2005, the number of failed listings has increased disproportionately. A failed listing is one that is reported as expired or withdrawn in the MLS system. In 2005, for every 100 listings that sold, 41 listings failed. As sales fell 4.4% in 2006, the incidence of failed listings doubled. For every 100 listings sold in 2006, 85 listings failed. With sales falling again in 2007 by 22.9%, the incidence of failed listings also increased by a factor of 60% over 2006. For every 100 listings sold in 2007, 136 listings failed.

Failing listings is particularly problematic as the listing price increases. For example, in 2007 the ratio of failed listings to sold listings for listings priced over $500,000 was 2.5 to 1. For listing priced between $400,000 and $500,000 the ratio of sold to failed was 1.9 to 1. Only in the listings priced less than $200,000 was the ratio less than 1 to 1.

One metric of note is that the average sales price of sold listings has increased over the last two years. In 2005 the average sales price of a Fayette County sold listing was $298,182. In 2006 the average sales price had increased to $321,227. The average sales price fell slightly in 2007 to $314,463. These sales price metrics do not reflect any increase in property values over the period. They simply reflect the fact that sales of listings priced over $300,000 make up a greater percentage of total sales than in previous years.

In 2005 sales of listings priced under $300,000 comprised 63.4% of Fayette County sales. That percentage had fallen to 55.8% in 2006. In 2007 the sales of listings priced under $300,000 comprised 56.7% of sales. Since some of the sales in the over $300,000 market are valued in the million dollar range, the effect of the shift in sales to upper price range listings is to bring the average sales price up.

If you have any questions or comments about this article, or would like a copy of my data analysis, please call or email me. My listing performance reviews for Fayette County and surrounding counties as of February 1st are now available so please call or Email me to request your copy.

All of my articles are available on-line at www.thecitizen.com in the Real Estate section. For the best-in-class listing search engine, please visit my website at: www.metrobrokers.com/chuck.fister
Chuck Fister is a Realtor, Georgia Real Property Appraiser, real estate consultant and sales agent with Metro Brokers/GMAC Real Estate. Call him direct at (678) 587-3425 or Email to chuck.fister@metrobrokers.com

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