August, 2009 Update: The trend continues- three pretty good sales months in a row.

Please keep in mind, when the ratio equals 1, it signifies it not being a buyer’s market or a seller’s market, but a completely even market. The lower the number, the more it is slanted to a buyer's market.

We put the recent numbers together so you can easily see the "climbing trend":

Aug, 2009 155 new listings & 113 under contract for a ratio of: .73
Jul, 2009 187 new listings & 131 under contract for a ratio of: .70
Jun, 2009 189 new listings & 134 under contract for a ratio of: .71
May, 2009 168 new listings & 133 under contract for a ratio of: .79
Apr, 2009 230 new listings & 138 under contract for a ratio of: .60
Mar, 2009 212 new listings & 137 under contract for a ratio of: .65
Feb, 2009 197 new listings & 84 under contract for a ratio of: .43
Jan, 2009 203 new listings & 84 under contract for a ratio of: .48
Dec, 2008 145 new listings & 66 under contract for a ratio of: .46
Nov, 2008 170 new listings & 69 under contract for a ratio of: .41
Oct, 2008 165 new listings & 67 under contract for a ratio of: .41
Sep, 2008 203 new listings & 84 under contract for a ratio of: .41
Aug, 2008 258 new listings & 104 under contract for a ratio of: .40
Jul, 2008 218 new listings & 86 under contract for a ratio of: .39
Jun, 2008 223 new listings & 71 under contract for a ratio of: .32
May, 2008 217 new listings & 87 under contract for a ratio of: .38

June, 2009 Update: I expected another month of improvement in our ratios (see below), but when I calculated the May ratio, I was more than a bit surprised:

May, 2009 168 new listings & 133 under contract for a ratio of: .79!

What an improvement! This clearly shows that homes are selling well and less are being listed, and that is after a couple months of improvement. Now sellers, don't take this the wrong way - it isn't 2006 again. These sales are on the best-priced properties (mainly foreclosures & short sales) and the majority of listings are still overpriced, but when sellers price right, homes sell.

May, 2009 Update: Well, the last two months have improved quite a bit - I can't be absolutely sure YET, but I do think we've reached the bottom. That said, I also think "the bottom" will be around for a while. I am pretty sure it will be like it has been the past few months - the deals will be here and there (not all at once like some "magic low").

Apr, 2009 230 new listings & 138 under contract for a ratio of: .60
Mar, 2009 212 new listings & 137 under contract for a ratio of: .65
Feb, 2009 197 new listings & 84 under contract for a ratio of: .43
When the ratio equals 1, it signifies it not being a buyer’s market or a seller’s market, but a completely even market. The lower the number, the more it is slanted to a buyer's market. (See below for prior numbers)

Feb, 2009 Update: Wow, what a difference a couple months make. We are slowly going in the right direction again. That said, it will be very much a buyers market for months and months - I'd guess all of 2009 and possibly longer. But buyers also need to realize that the best deals will be "plucked" throughout the entire year so they have to hunt carefully (and utilize someone with great local market knowledge to help them hunt for the best of what is out there).

The recent ratios were (see May, 2008 Update for how this "works"):

Jan, 2009 203 new listings & 84 under contract for a ratio of: .48
Dec, 2008 145 new listings & 66 under contract for a ratio of: .46
Nov, 2008 170 new listings & 69 under contract for a ratio of: .41
Oct, 2008 165 new listings & 67 under contract for a ratio of: .41
Sep, 2008 203 new listings & 84 under contract for a ratio of: .41
Aug, 2008 258 new listings & 104 under contract for a ratio of: .40
Jul, 2008 218 new listings & 86 under contract for a ratio of: .39
Jun, 2008 223 new listings & 71 under contract for a ratio of: .32
May, 2008 217 new listings & 87 under contract for a ratio of: .38

Again, see the original May, 2008 update & chart below to see how this all "works", but a ratio of 1 would be a completely balanced buyer/seller market - we're very much slanted toward a buyer's market, but it's better than it was (of course, many sales are short sales and foreclosures and the few sellers who finally brought their prices down to realistic levels - more sellers need to follow this path!).

The glimmer of hope for sellers is to compare the .22 ratio for Jan, 2008 with the .48 ratio for Jan, 2009 - it was over twice as good for sales this month as the same period last year. Also, many of the new listings are foreclosures (where the bank takes the home and re-lists it as new with another agency, so many of these "new listings" were homes which sat overpriced for a year or more and are simply re-lists that are priced much better).

Feb, 2009 UPDATE: Foreclosures

As of the end of January, 2009: 204 foreclosure & short-sale listings in Sebring & Lake Placid with 51 under contract for a ratio of .25. 1559 total (non land-only) listings with 121 are under contract for a ratio of: .08

What does this show? Foreclosures are moving very well and private seller listings sit and sit because they are overpriced - math simply doesn't lie.

(NOTE: This ratio is different than the overall trend ratio we also use - please don't get them confused.)

Well, the "path to recovery" that went from January to May was interrupted (see below). May dropped off to between January and February numbers. It wasn't much better through August.

(Please read below for information on how this "works")

When looking at markets, math doesn’t lie. It is the best thing an investor (or simply someone wanting to make a good choice) should rely on – not media hype or crisis talk.

The following is a look at the number of new (non-land only )listings in Sebring & Lake Placid versus listings that went under contract. When the ratio equals 1, it signifies it not being a buyer’s market or a seller’s market, but a completely even market. In early 2004, I first started graphing these ratios and found that more listings were slowly “appearing” on MLS versus listings going under contract. A trend developed very early in the year. That is why we called the bust in early 2004 while nearly all the experts (on TV, in the newspapers, the local builders & agents, investors, and more) were talking about the boom going on and on:

As we can see, each month the ratio has been getting larger, showing a “path to recovery.” Now, with markets, sentiment (and media coverage, experts talking recovery, etc.) lags the actual recovery – just as we charted the bust long before the vast majority of people talked about it.

Keep in mind that some of the homes going under contract don’t actually sell (the deal falls apart) and some of the new listings are actually old listings which have expired that are being re-listed with other brokers/agents (this should about equal out, but even if it isn’t exact, it’s the trend you should look at).

The January ratio is dismal. That signifies a completely distressed market. Now, the April ratio is better, but still signifies a heavily-slanted buyer’s market – basically, 1 home going under contract for each 2 listed. Now that isn’t a “crisis,” but it isn’t great. When the ratio gets to be around .7-.8, that is when the “experts” will be trotted out like crazy in the media (of course, I am looking at regional numbers, but I’d guess a national trend will occur at about the same time).

Our only big concern going forward is that the ratio may go down in one or several of the upcoming months as the best homes are sold (see 2nd/3rd Quarter Updates on the Market Commentary Page - link bleow). Basically, by the best-priced homes being sold, prices effectively “go up” as the remaining listings are higher priced for whatever type of home they are. We have seen this occur so far in May – many of the best homes we have been watching have been purchased by our clients and other smart agents’ and brokers’ clients. Unfortunately, many of the remaining sellers are being misinformed by agents who simply do not understand how markets work and they think: “The market is getting better, so my price will now work.” But that is simply not true. Most buyers will wait. Sellers must understand: The market may be getting better, but it was horrible. Significant price appreciation is a long way off – most listings still need to come down in price (and the ones that sell almost surely will).

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