What real estate bubble?
One of the many things I’ve watched with fascination lately has been the clamoring in the national and local media about the housing market bubble and bust. As an active real estate agent in Roanoke, I haven’t noticed this trend. I’ve heard other agents complain about slowing sales since the end of last summer and the like but it isn’t something I’ve personally noticed. In my opinion, most of the homes still lingering on the market are there because they are priced wrong, have something wrong with them or another nearby home is unattractive to potential buyers.
Rather than just say I think it’s hype in the Roanoke market though, I’d like to present some figures to back it up. Take a look at this chart. The data on this chart was obtained from reputable sources, namely the Virginia Association of REALTORS and the Roanoke Valley Association of REALTORS who in turn collected this data directly from the MLS for the Roanoke Valley. Although not entirely representative of every sale, it is in my opinion the best sample of home sales around.
Disclaimer: I am not a statistician. :)
A few items to point out. The first thing you will note right away is the trend lines do not significantly deviate from each other. The reason? Because the data from year to year in total home sales is so close.
Now, on to a more detailed look. The orange line is data from 2004, the green line from 2005, the yellow line from 2006 and the blue line is data for 2007 through February. Let’s pull a couple of items out to compare and contrast. In December of 2005, there were 412 homes sold in the Roanoke Valley. In December of 2006 there were 381. That’s a difference of 31 homes sold or down about 7 percent. That’s hardly the bust we’ve been hearing about in Roanoke.
But maybe you say sales are always slow in December? Then let’s take a look at the prime selling season. The total home sales in July 2005 was 568. The total a year later in 2006 was 505. That’s a difference of 63 homes. A little more significant but still only down 11 percent.
Well you say…what about currently. Certainly after December home sales must be down. Actually they’re not. Sales are right in line in 2007 where they were in 2006 and higher than they were in all the previous years here.
Where is the dramatic bubble bust in the Roanoke Valley? It doesn’t exist I say. Roanoke hasn’t experienced the dramatic ups or downs the national and local media have been decreeing lately. We’ve remained pretty steady in our home sales from year to year.
So rock on, I’m looking forward to this year’s real estate season. The season? January through December.
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5 Responses to “What real estate bubble?”
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Is it because Roanoke never really reached the growth rate that other cities had nationally, so there was no true bubble, therefore there cannot be a bubble to burst?
Or have we had steady managable growth over that period when others have really massive growth rates?
I think the short answer to both questions is “Yes”.
One of the benefits to living in the Roanoke Valley and really most of southwest Virginia is our market economy shelters us from the volatile ups and downs of much larger metro areas like northern Virginia.
And because of this our times of growth and decline are much more manageable.
I agree wholeheartedly, Marty – the peaks and valleys seem a lot less tricky when you take the slow and steady approach.
The Blue Ridge Business Journal’s latest edition asks your question in its cover article…You are setting the tone….
I was surprised to see the article when it came out but glad to see someone else giving the idea some air time :)