For the most part, charts and graphs have never interested me much. It is probably because in the stock market I’ve never had faith when someone on CNBC is pointing at a graph and how, for example, a “head and shoulders” pattern in a chart is a clear sign to sell or buy. To me, it seems like it is far too subjective. In real estate, I think the statistical information displayed in charts is more telling.
The sale to list price ratio is what percent of the list price a home sold for at closing. Below are two charts with twelve months of real estate data from the Greater Alexandria Area Association of REALTORS for residential sales. The first chart shows the average sale to list price ratios for homes that sold in Alexandria, Minnesota with the second chart displaying the average ratio relating to the original list price of the home. The trend for the 12 month period for both is upward.
Sale to List Price Ratio
[market_stats width=”500″ height=”400″ type=”ratio” display=”SaleToListPriceRatio” property_type=”A” location=”City=’Alexandria’&Alexandria”]
Sale to Original List Price Ratio
[market_stats width=”500″ height=”400″ type=”ratio” display=”SaleToOriginalListPriceRatio” property_type=”A” location=”City=’Alexandria’&Alexandria”]
The improving sale to original list price ratio may be the result of sellers being more appropriate in their asking price at the time of signing a listing contract. Or, the rising trend could the result of an increase in the number of potential buyers and/or that sellers are making fewer price reductions. Improved buyer confidence might be another reason. Or, maybe it is because of fewer homes for sale versus the past few years. Extremely attractive interest rates certainly don’t hurt. I think it is a combination of all of the above and that the trend in the charts above will continue upward. Recent multiple offer situations in Alexandria give me confidence my opinion is correct.
What do you think?
[Note: My commentary about the data is for the period of October 2011 thru September 2012 and the date will update monthly as time progresses]