Richmond Real Estate Market Report


Blog by Arnold Shuchat | August 3rd, 2013


The Seller's Delusion Index-July 2013

As can be seen from the table below, the SDI is calculated as the sum of expired listings in a period plus terminated listings in that period divided by the number of units sold in that same period.  The higher the ratio, the more "out of whack" sellers are with buyers. To put this into perspective, in February 2011 33.8% of all listings were frustrated by a termination or an expiry of roughly 1 in 3.  A similar period in 2013 showed a 535% increase in this frustration index.  At some point, when these statistics show such a large change, I figure that somebody's expectations are out of whack.  Since the customer is always right and the buyers can do whatever they want with their money, I attribute these erroneous expectations to the sellers.  Hence, the term "Seller's Delusion Index". How are we doing as compared to the fading memory of February 2011? For one thing, June and July of 2013 reflected more "realism" than the numbers did, even back in the same periods in 2011! In summary, with a lowering of the SDI, things appear to be less "out of whack" and that is a good thing for both buyers and sellers. See below, the data makes good material for the bears to chew on! (Next up, Vancouver...Feel free to Retweet these reports).

July 2013 Seller's Delusion Index-Richmond
Detached Properties
    July     June     May    April
  2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011
# of Sales 95 57 115 121 69 155 68 96 146 88 111 140
# of Expireds 83 117 75 97 142 82 79 112 79 59 82 46
# of Terminated 27 88 77 47 80 131 42 107 86 48 66 70
Ratio of Expireds    
& terminateds to      
Sales (SDI)      
Month of July 1.16 3.6 1.32
Month of June 1.19 3.22 1.37
Month of May 1.77 2.28 1.13      
Month of April 1.21 1.33 0.829      
Month of March 1.81 1.34 0.338      
 
  Attached Properties
July June   May April
2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011
171 130 198 194 178 221 143 166 245 150 181 230
110 125 79 116 139 100 76 98 46 90 94 37
47 90 104 46 106 108 54 127 93 48 105 83
           
Ratio of Expireds      
& terminateds to      
Sales (SDI)
Month of July 0.92 1.65 0.92
Month of June 0.84 1.38 1.06
Month of May 0.91 1.36 0.567
Month of April 0.92 1.099 0.522
Month of March 0.886 0.667 0.276