The 3rd quarter of 2009 has already come and passed! Our brokerage, Kline May Realty, sends out a market report each quarter. Despite an increase in sale activity over the past couple of months, there are still some discouraging trends, as you will see in this report.
This quarterly market report and commentary is provided by Kline May Realty to our agents and clients. All market data has been drawn from the Multiple Listing Service of the Harrisonburg – Rockingham Association of REALTORS and includes information on transactions involving a REALTOR. This report does not include data from private sales.
Within this report, we describe current market conditions based upon several market indicators: Average and Median Sales Price, Average Days on the Market, Absorption Rate and Listing Inventory. Market activity remained slow in the third quarter of 2009, although showing activity and contracts from first time buyers continues to increase over 2008. The market appears to be gradually moving towards a more balanced state, with inventory and prices continuing their very slow decline.
Despite the first-time buyer activity and declining prices, 12-month absorption rates continue to climb. As of September 30, 2009 absorption rates for single family residential and townhomes were virtually identical at 13.9 months for the Harrisonburg and Rockingham County market.
While inventory has remained relatively steady during the 2nd and 3rd quarters, it remains higher than September 2008 in both Harrisonburg and Rockingham County.
Average and median sales prices continue to decline gradually as Sellers continue to adjust to the expectations of the market. Individual monthly averages vary widely, but a 12-month rolling average smooths out the trend. Using this method, average sales price has dropped from $224,988 in January, 2007 to $209,206 in September, 2009 (7.01%). The median price has fallen from $195,000 to $185,000 during the same period (5.12%).
Unfortunately, Average Days on the Market has climbed steadily through the 2nd and 3rd quarters of 2009. As with the sales price charts, monthly averages vary, but a 12-month rolling average shows the clear trend.
The Days on Market corrolates well with the increasing absorption rates discussed earlier. While we believe the 4th quarter of 2009 will be improved over 2008, we don’t expect a robust recovery until sales prices come more in line with what the market is willing to bear, perhaps by the 2nd or 3rd quarter of 2010.