Prince William County Virginia Real Estate: Sales Volume on the Rise

Manassas, VA (PRWEB) November 16, 2008 -- While most of the world is fixated on the Bailout Plan, Wall Street or, how the new President Elect will shape our nation in the months to come...others are left wondering, how has our local real estate market faired given such uncertainty? Keith M. Elliott Jr. a Realtor® with RE/MAX Olympic Realty in Haymarket, Virginia discusses real estate market statistics for Prince William County Virginia. Mr. Elliott also shares his professional opinion on the current market as we draw near the close of the year.

"I think it would be very benificial for the public to know the real estate market statistics for our county...so, that they can see for themselves what considerable improvement has been made" said Keith M. Elliott Jr. a Realtor® with RE/MAX Olympic Realty in Haymarket, Virginia. "For someone living in Prince William County...they might hear or, read a market report on a National level and believe those same conditions apply to their given geography...when in actuality, each locale is very different" Elliott said.

One of the processes that real estate agents like Mr. Elliott use in order to better understand how the market is trending is by closely examining the Absorption Rate.

What is the Absorption Rate and why is it important?

The Absorption Rate is the rate at which it will take the current level of inventory to sell based upon today's monthly sales figures. The absorption rate is calculated by taking the total number of active listings in one month divided by the number of units sold in that same month. This rate is extremely important in determining the direction of the housing market since it derives the number of months it will take to sell off the current level of inventory assuming there is no change in pace. The absorption rate does not factor in any new listings coming on to the market, it simply looks at the values as they are today or, in that given month.

According to the absorption rate data presented below, January of this year had 17.16 months of inventory on the market available for sale. A statistic that is obviously quite discouraging since that means it would take just over 17 months to sell all of the existing inventory at the current number of sales. Over the span of the last several months, that number has been greatly reduced to 5.02 months as per the much lower October absorption rate.

So, given this positive signal in the Absorption Rate does that mean we are on the road to recovery?

"I believe it is both a healthy and positive sign that home sales in our county have increased substantially month over month...we went from having 17 month's of inventory back in January to only 5 months in October...the number of sales increased each month peaking in September with 934 units sold. This comeback speaks volumes" Elliott said.

"The downside, however" Elliott cautioned, "is that the average sold price for these properties dropped alarmingly from $318,859 in January to just $228,581 in October, a difference of approximately $90,000. It also suggests that the lower prices may have contributed significantly to the increased number of home sales. It would have been better not only to see the volume of sales increase (as we have here) but, also to see the average sold price increase as well".

- 2008 REAL ESTATE MARKET ABSORPTION RATE -

January 17.16 months (5355 active listings and 312 sales)

Average Sold Price $318,859

Average Days on Market 135

February 16.53 months (5573 active listings and 337 sales)

Average Sold Price $307,392

Average Days on Market 125

March 11.47 months (5757 active listings and 502 sales)

Average Sold Price $299,586

Average Days on Market 134

April 9.20 months (5880 active listings and 639 sales)

Average Sold Price $291,852

Average Days on Market 132

May 7.74 months (5601 active listings and 724 sales)

Average Sold Price $284,509

Average Days on Market 128

June 6.59 months (5501 active listings and 834 sales)

Average Sold Price $288,005

Average Days on Market 121

July 6.02 months (5217 active listings and 866 sales)

Average Sold Price $255,185

Average Days on Market 112

August 5.76 months (4835 active listings and 838 sales)

Average Sold Price $251,384

Average Days on Market 111

September 4.80 months (4489 active listings and 934 sales)

Average Sold Price $230,999

Average Days on Market 107

October 5.02 months (4222 active listings and 841 sales)

Average Sold Price $228,581

Average Days on Market 114

We asked Elliott his professional opinion about the market direction for Prince William County Virginia as we draw near the close of the year.

"I honestly believe the sales volume may decrease from here on through the early part of February 2009. From the historical data that I have reviewed, the slowest period in the real estate market for this county appears to be between November 1st extending through to the end of January. Obviously, I hope it does not prove to be the case this year...however, I am remaining optimistic". Elliott went on to say that he will be continuing to monitor the market conditions very closely.

Next, with the Average Sold Price declining each month since January, we wanted to know if the homes listed at or, above $500,000 have been affected.

"Financing for homes priced over $417,000 require what is called a 'jumbo mortgage' so these homes may not be as easy to purchase given the "tightening" of lender provided loan requirements" Elliott said. "Homes over $417,000 are still selling though...just not at the same pace that I see lower priced homes selling at" Elliott said. Since January, the number of active listings has been reduced considerably from 814 to just 464 in October.

- ABSORPTION RATE ON HOMES PRICED OVER $500,000 -

January 35.39 months (814 active listings and 23 sales)

February 38.33 months (805 active listings and 21 sales)

March 25.03 months (776 active listings and 31 sales)

April 19.89 months (756 active listings and 38 sales)

May 17.94 months (700 active listings and 39 sales)

June 10.62 months (659 active listings and 62 sales)

July 16.16 months (598 active listings and 37 sales)

August 13.21 months (555 active listings and 42 sales)

September 19.64 months (491 active listings and 25 sales)

October 11.89 months (464 active listings and 39 sales)

Lastly, as we continue to examine the health of the Prince William County real estate market, we shift to glimpse at the rental market. We can see by the statistics provided below that the number of rental units fluctuated throughout the year with no set pattern.

- 2008 UNITS RENTED -

January     211

February     264

March     275

April     241

May     312

June     301

July     358

August     336

September     223

October     215

"I think the rental market has benefited the most from the dramatic increase in foreclosures" Elliott said. He continued "there are many families out there who have been (and will be) affected by foreclosure and these folks need housing...maybe they could not comfortably afford to pay their Adjustable Rate Mortgage (ARM) loan when it adjusted upwards (sending their monthly mortgage payment soaring) but, they can still afford to pay something per month for shelter. I believe what we are seeing now is that these families who may have lost their home to foreclosure...are now moving into rental units, and the tenants that were in those rental units are out buying homes because they realize with prices this low, they can finally afford to buy a home to call their own. Investors have also been helping the market by scooping up bargain priced properties with the intention of renting them out."

About Keith M. Elliott Jr.:

Mr. Elliott represents individuals, investors, and REO institutional clients in the purchase and sale of Prince William County Virginia real estate. He does this by carefully listening to your current needs and requirements and then creates an action plan to achieve your goals with the least expense and inconvenience to you in the shortest time possible.

Contact Information:

Keith M. Elliott Jr.

Prince William County Real Estate Expert

Realtor®, e-PRO®, ABR®, SRES®, Commercial Specialist®

RE/MAX Olympic Realty

15100 Washington Street

Haymarket, VA 20169

Office: (703) 530-2955, Ext. 6316

Cell: (540) 272-9012

Fax: (703) 891-9490

Email: kelliott @ comcast.net

Website: MyRealtorKeith.com (http://www.MyRealtorKeith.com)

Blog: Active Rain Blog (http://www.activerain.com/kelliott5264)

Copyright© 2004-2008 by MyRealtorKeith.com, All Rights Reserved.

Each RE/MAX office is Independently Owned and Operated. MLS Data provided by the Metropolitan Regional Information System. Information deemed reliable, but not guaranteed.

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