Richmond Real Estate Market Report & Sellers' Delusion Index


Blog by Arnold Shuchat | January 11th, 2014


Updated Sellers' Delusion Index for Richmond, 10 months Ending December 31, 2013


Here are the Richmond numbers for my SDI which includes data from the last 10 months. As you go through this data, bear in mind that the lower the SDI number, the stronger and "less disappointed" sellers are.  A high SDI indicates frustration of the listing process while a low one indicates transactions instead of frustration.

Although there are significant variations from month to month, I like to compare recent data to that of the strong part of 2011 so that we can see where we have been and where we are now.  The SDI is a simple calculation which adds up the expired and terminated listings for a given month and divides the total by the number of sales in that period.  When it is low, it means that a greater percentage of listings have resulted in a transaction.  When it is high, we have a scenario where the property has not sold for some reason and the mandate and the sellers have been frustrated. This is most likely a result of an unreasonable price expectation for the period.

What is the important take-away from these 2 tables today is that the best we have seen was in 2011 for detached properties with an SDI of .276 (attached) and the worst has been around 3.34 (Detached)September 2012 for the months reported giving us an average of the extremes of: 1.8 and that no matter how you slice it, we are far better off where we are now, (assuming you are not hoping for a crash) than where we were just over a year ago. Sales have recovered nicely from the lows of the last 2 years, but more importantly, sellers have come to grips with the market realities and are less apt to get as greedy as things were just 2 years ago.

It is important to note that December as a month is a statistical aberration. It represents a natural point in time when sellers will either terminate a listing or will have agreed to have listed it until that point in the first place.  As such the SDI ratio is unusually high for December annually.  What is important to take away is the annual or seasonal trend and from that point of view, the market from a seller's sentiment point of view is far more balanced and realistic than it has been in either of the two preceeding years.

Seller's Delusion Index-Richmond
Detached Properties
    Dec     Nov    
  2013 2012 2011 2013 2012 2011 2013
# of Sales 76 45 53 105 57 96 111
# of Expireds 155 231 174 68 99 74 106
# of Terminated 40 46 55 44 70 75 39
 
Ratio of Expireds
& terminateds to              
Sales (SDI)              
Dec 2.57 6.16 4.32        
Nov 1.07 2.96 1.55        
Oct 1.3 2.96 1.5
Sept 1.42 3.34 1.73
Aug 0.98 2.85 1.94
July 1.16 3.6 1.32
June 1.19 3.22 1.37
May 1.77 2.28 1.13
April 1.21 1.33 0.829
March 1.81 1.34 0.338
 
  Attached Properties
Dec Nov
2013 2012 2011 2013 2012 2011 2013
# of Sales 117 91 102 169 114 153 180
# of Expireds 185 303 289 85 83 113 76
# of Terminated 76 78 77 83 100 130 49
 
Ratio of Expireds
& terminateds to
Sales (SDI)
Dec 2.23 4.19 3.59
Nov 0.99 1.61 1.59
Oct 0.694 1.88 1.3
Sept 1.29 1.43 1.69
Aug 1.21 2 1.29
July 0.92 1.65 0.92      
June 0.84 1.38 1.06      
May 0.91 1.36 0.567      
April 0.92 1.099 0.522      
March 0.886 0.667 0.276      

 
If you, your friends, family or people you care about are thinking of buying or selling a property, please
email me at: ashuchat@shuchatgroup.com or call me at: 778-227-7325 to discuss
a detailed purchasing or marketing plan which could help save thousands of dollars.