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First Stone Realty, Inc.

444 Seminole Rd.

Muskegon, MI 49444

 

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Phone (231) 737-9000

Fax (231) 737-9002

Market Topographics ^TM

One of the best forecasts for real estate sales is found by closely examining the relationship that exists between “supply” and “demand.”  If supply exceeds demand, it tends to depress prices.  If demand exceeds supply, it tends to enhance prices.  Current data as relates to supply and demand, reported by broad price range and broad market area, is as follows:

 

Early 1^st qtr. 2010

 

Muskegon County                                         Northern Ottawa County

Price Range                             AR¹     T²         Price range                              AR¹     T²

$0-49,999                                  0.44     ↑            $0-49,999                                0.15     ↓

$50,000-99,999                        0.61     ↓          $50,000-99,999                       0.70     ↑

$100,000-149,999                    .98      ↓          $100,000-149,999                   0.58     ↓

$150,000-199,999                   1.01     ↓          $150,000-199,999                   1.18     ↓

$200,000-249,999                   1.71     ↓          $200,000-249,999                   1.33     ↓

$250,000-299,999                   1.39     ↓          $250,000-299,999                   6.00     ↑

$300,000-349,999                   6.14     ↑          $300,000-349,999                   1.96     ↓

$350,000-399,999                   2.10     ↓          $350,000-399,999                   2.00     ↓

$400,000-449,999                   1.50     ↓          $400,000-449,999                   2.38     ↓

$450,000-499,999                   2.00     ↑          $450,000-499,999                   2.25     ↓

$500,000-                                  4.44     ↓          $500,000-                                  4.20     ↓

Keys

¹  AR = absorption rate.  A comparison between current available inventory and units sold in the last 12 months, expressed in years (ex., a value of 1.50 would reflect 1-1/2 year’s supply, currently for sale).

²  T = most recent trend.  This indicates movement from the last quarter’s reporting.

 

*Note*

Buyers would like to see these numbers trend up

and

Sellers would like to see these numbers trend down.

 

Broad market considerations

Current consumer confidence.  Is it trending up?  Is it trending down?

Current home loan interest rates.  Are they trending up?  Are they trending down?

 

Honing in on current value

The absorption rates shown above only hint at how the market might perform for you.  Two (2) key concepts that should be kept in mind:

1. Buyers shop fairly narrow price ranges (10% is common) and the price ranges shown above, in most cases are too broad.
2. Buyers shop fairly narrow geography (1 school system only is common) and the areas shown above, in most cases are too broad.

Further, two (2) more key concepts heavily impact value and market performance:

1. Location, location, location, including things like:

   a. Bodies of water; to include ownership of frontage, legal access to and views of water.

   b. Closeness to schools, employers, product & service providers (stores, doctors, transportation, etc.).

   c. Value and condition of surrounding properties

2. Amenities, amenities, amenities, including things like:

   a. Home style, levels

    b. # of bedrooms, bathrooms, amount of finished sq. ft. of living space

   c. Other amenities, material quality and condition

   d. Age of home and/or age of improvements

   e. Substructure (basement, etc)

   f. Garage size, additional storage (exterior)

   g. Parcel size (width, depth)

Best forecast

How a property compares to similar properties currently being marketed . . . and how a property compares to similar homes . . . sold recently . . . and within relatively narrow geographical areas . . . is a very accurate predictor of near term market performance.  A comparative market analysis, prepared by an experienced local Realtor, should take all of these factors into consideration when making an assessment as relates to current value.  Most Realtors provide this counsel free of charge.

 

©First Stone Realty, Inc.                                            Jan., 2010