Local Market Conditions & home prices

Funny Looking Chart

Local home sales Trends

The chart has data from the local MLS (Regional Multiple Listing Service). The data is for the city of St. Paul and includes all single family homes and condos that have been listed in the MLS this year.  The red line shows how many homes were listed each week and the blue line shows how many homes received offers on them that were accepted by the sellers each week. We call that number "pending sales".  Pending sales data is often used to determine the health of the real estate market.

I added trend lines to the chart, well actually I let MS excel do that for me. The lines show that the number of homes listed each week is slowly going down while the number of pending sales is going up, but even more slowly.

These numbers are important. As the lines get closer to each other the supply of homes and the demand will be more balanced and theoretically home prices will stabilize. Last year the number of homes on the market went way up.  Supply and demand were out of balance because while listings were going up, sales were going down.  This year the inventory has been slowly decreasing all year.

We don't really know how many people would like to sell but have decided not to, or how many people want to buy, and can buy but are not buying.  I am not sure there will ever be a way of getting that kind of information.  My sense is that there are people who want to sell, and those who want to buy that are not taking any action at the moment. That is based on my own daily contact with home buyers and sellers.

10 comments on “Funny Looking Chart
  1. Michelle says:

    I really love your website, but wanted to comment on your data. The dates that you chose to chart tend to skew the results a bit, IMHO. Obviously there is going to be an increasing trend if you track home sales from the beginning of the year to beginning of October. If you charted the MN real estate season (you would know best when this is, but I doubt that it includes January & February), I think the slope would give a more realistic picture of the trend. Keep up the great work, I really think you are terrific.

  2. Teresa Boardman says:

    Michelle – the chart is ongoing. I did the same thing last year and at this time of year the lines were slanted the opposite way. This is an accurate reflection of what we are all seeing as a major trend. It is the relationship between the two line that is the most important.

  3. T-

    I have to agree with Michelle… I don’t believe the Pendings trendline is an accurate reflection of the market. If you look at May – October I’d probably place a trendline that nearly mirrors the listings just lower.

    What is a fact is that listings on the market are falling and sales have “bottomed” in that we have more sales today than we did last year at this time. Those are good signs.

  4. Erik Hare says:

    This is where the engineer steps in:

    You’ve got a straight line plotted through the data, and that’s valid for a first look. Certainly, we’re moving more towards a balanced market and that’s good news.

    What’s the definition of the point where they cross? Eh, that’s up to you. If you consistently take the last 20 weeks, or whatever, and drawn a trendline, it’s as good as any other. If you want to be very kewl you can use a curved line predefined by Xcel that constantly makes that adjustment. But whatever.

    The point is that we want a balanced market and anyone can define that any way they want.

    The news is clearly getting better all the time. They look like they’ll cross in about … I dunno, next Spring. Huzzah!

    Now, if only I could get work as an engineer …

  5. Teresa Boardman says:

    I don’t think they will cross but it they did that would an almost perfectly balanced market. I would like to see two parallel lines.

  6. Ruthmarie Hicks says:

    OK – time for a former scientist who specialized in genetics to support the former engineer. Genetics is part molecular biology, part statistics. Statistics are powerful, but messy. However, this is pretty clean. Will the winter months skew the trend? Possibly. But that’s not different from any other year bull or bear market not withstanding. This is a strong trend over time and I actually wish that all the data I generated in the lab looked that good.

    Now…if only there was only employment for a Ph.D. in genetics/immunology and engineers, Erik and I would both be happy campers.

  7. Teresa Boardman says:

    Erik & Ruthmarie – thank you both so much. I am a Realtor, my education is in social sciences and I did get straight A’s in statistics but I don’t consider myself a statistician. I do appreciate the critique. I am just trying to show the ratio fo supply and demand. Yes real estate is seasonal but those ratios do not vary from season to season as much as the volume does. In a typical spring more homes go on the market and more are purchase and in the winter fewer are listed and fewer purchased.

  8. Ben Roberts says:

    I think this is a fabulous way to show that things are not always as the media says. Just a thought here, are some of those new listings expireds that have been relisted? If so, that might skew the data for the worse. Either way, it’s something I plan to implement on my blog to show that things are looking up in our local market. Thanks for another great post.

  9. Fred Kogler says:

    T. speaking to your last paragraph…I was at the hair shop yesterday getting my ears lowered. While sitting and listening a few folks came and went and guess what the topic of conversation was? Real estate! Oh, HOW I WISHED THAT YOU COULD HAVE BEEN THERE. One fellow was getting ready for a trip to Fla., he spoke at some length about his $400,000 home having been on the market, but now its resting on the side line, “we’ll put it back on the market early ’09 to see what we can get.”
    Another gal offered that she had a townhome that she wanted to sell, didn’t need to, but she wanted to move into a single family residence on a lot with room to garden as she was about to retire. “It’s paid for, so whatever I get will be more than what I bought it for 12 years ago.”… And, still another, a fellow, spoke of holding his home off the market until prices recovered a little…he wasn’t sure when that would be though given the present state of things economicly speaking… I thought to myself, now this is the place to come for the real story…wish you had been there! Oh, yes, as I sat next to the door, I had all that I could do to refrain from giving them my business carrd as they passed by. The shop manager laughed when I got in his chair, and commented, “Ya, just don’t know who’s sitting in the room with you!” We kept the discussion going for a bit longer and then turned to the upcoming election.

  10. Teresa Boardman says:

    Fred – this isn’t news to be at all. I hear this conversation every fall. They always want to wait for spring. It was the same in 2006 and 2007 too with people wanting to sell, trying to sell and then taking their homes off the market. Nothing new with this.

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Realtor®, MN,
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Saint Paul Home Realty
651-216-4603
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