May 09, 2011

When is the real estate market going to recover in Walworth County?

Posted to Debbie Cobian

I can’t tell you how many times I’m asked the question, “As a real estate professional, when do you think the market is going to get better?” Because I am a statistical person, I’ve struggled with how I can best answer that question. I don’t want to ‘have a feeling,’ I want to have an answer that is supported by facts, statistics and real numbers.

A lot of times when I’m asked that question, it’s by property owners who are looking back at what they paid for their house a few years ago or where sales used to be in their neighborhood. Sometimes they are looking at what the fair market value is still saying on the tax bill they receive in the mail each year. What they are really asking is, “When is my property going to be worth what it was when the market peaked several years ago?”

The ‘statistical’ answer to that question is, prices will begin increasing or ‘recovering’ when the supply and demand levels off and the market starts leaning toward a seller’s market again. The real estate industry determines a seller’s market to be when there is a one to four month supply of homes in an area.

When I analyzed Walworth County absorption rates last week,the current supply and demand of single family homes was 20.87 months. Condominiums had a 32.63 month of supply based on the current rate of sales. These numbers have been very difficult to acknowledge and to share, but they are the actual numbers for Walworth County as of May 2011. The statistics change on a daily basis, however, the market isn’t going to ‘recover’ until the rate of sales increases and inventory decreases.

Based on current data, this means the supply of homes needs to decrease from the current rate of 20.87 months to a four to six month range to be in recovery and a one to four month range to peak again.

You’ll get more accurate information by analyzing your neighborhood and price range, similar properties or a 5 mile radius around your actual property than to use the figures for Walworth County real estate. I’ll be happy to help you determine the supply and demand in your neighborhood.

I realize how difficult it is to let go of our perceived values of real estate based on the past. Your property is worth today, what a buyer is willing to pay today and buyer’s know, it’s a buyer’s market.

 
If your goal is to sell your property in a shorter period of time than the absorption rates are indicating, it is important to position the price point to appeal to buyer’s based on the current competition.

 
If you’re like me and you really need to “see the numbers,” feel free to give me a call at 262-949-9818 or email me at

Posted by:  Debbie Cobian

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