Read the positive article below, "Marketing Indicators Signaling Another Turnaround" and then pass it on! We are now down to 4.5 months of supply as of today! Don't be the last agent to let your clients know!!!! Now is the time to buy!
"Marketing Indicators Signaling Another Turnaround"
Mike Orr, The Cromford Report, March 17, 2011
Almost all the key market indicators turned negative at the end of the second quarter of 2010, and thus predicted the fall in pricing we experienced during the second half of the year. See our News Archive (on the Cromford Report) for the warnings we issued in June and July 2010.
The good news is that now we are seeing the opposite happen. Those same market indicators are turning positive, suggesting we are likely to see prices strengthen over the next six to nine months.
It is generally regarded as very tricky to call a market bottom (or top) at the time it is happening, but real estate is a relatively slow-changing market and several key indicators give us fair warning if we choose the right ones and track them on a daily basis. The indicators we like are:
1. The Cromford Market Index™ - This has been over 100 since late December and around 110 since January 23. Click here for the graph! 2. Days Inventory - Has been falling steeply since November 21, a strong signal that supply is tightening and getting even stronger since January. Click here for the graph!
3. Pending Listing Count - Grown from 8,695 on January 2 to 12,993 on March 16, indicating plenty of buying interest. Click here for the graph!
4. Contract Ratio - Having dropped to 38 at the beginning of January, has increased sharply to over 62 by mid March. This again confirms a strong swing in the balance away from supply and towards demand. This swing applies to REOs, short sales and normal listings. Click here for the graph!
5. Monthly Sales Volume - Weak during the second half of 2010, this suddenly strengthened in December 2010 and has been well above last year through the first quarter of 2011.
6. Listing Success Rate - Has jumped from 58% in February to 65% now. Click here for the graph!
7. Sales Price as a Percentage of List Price - The low point was 94.23% on December 31. We have now improved to 95.37%.
There are two important measures that have not made much progress yet - Pending $/SF and Monthly Sales $/SF. That is because pricing is always the last thing to turn round. Currently the low points are $81.55 for pending sales on March 10th and $80.60 for monthly sales on February 22. We can now see both of these edging tentatively upwards. We do not expect dramatic rises, but we believe the price weakness experienced between June 2010 and March 2011 is all but dissipated. If we do see further dips they are likely to be small and short term affairs.
We have already seen two low points for monthly sales $/SF - April 6, 2009 and February 22, 2011. We may see more yet, but based on today's trends this is fairly unlikely in the short term. Barring unforeseen catastrophe or significant external events (e.g. government action) we appear to have started the second upward leg of our W shaped recovery. Hopefully we are going to get a W shaped recovery and not experience a VW shaped one!
Nothing is certain in this world. So if this current trend weakens or fails to follow through - you can sure we will be the first to inform you in the News and Commentary section of the Cromford Report. We recommend that you use the RSS feed for that section so you get early notice of any new entries. If instead the current trend strengthens as we expect, then our confidence in the above market indicators will be even greater in the future.
Use the Cromford Report!
The Cromford Report is an excellent source of information! There is an amazing amount of statistics, graphs and charts to help you, the agent, explain the market to your clients! You can use the info at listing appointments, when sitting open houses, to encourage your buyers to get off the fence, and in your email/newsletter campaigns! If you don't know how to utilize this Free-To-You tool, please contact me! I'll show you how to log in and some charts that I find to be useful!