Richmond Real Estate Market Report With Sellers' Delusion Index


Blog by Arnold Shuchat | November 24th, 2013


Updated Sellers' Delusion Index for Richmond, 8 months Ending October 31, 2013


Here are the Richmond numbers for my SDI which includes data from the last 8 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. From the numbers, it looks like attached properties, i.e. apartments and townhouses have recovered nicely and that expectations are more fully being met by sellers than in previous months.  For single family homes, it looks like although we have come a long way back, there is a relatively higher ratio of frustration on the part of sellers than for attached properties.  
 
Seller's Delusion Index-Richmond
Detached Properties
    October     Sept  
  2013 2012 2011 2013 2012 2011
# of Sales 111 77 105 84 64 101
# of Expireds 106 136 85 83 138 94
# of Terminated 39 92 72 37 76 81
Ratio of Expireds
& terminateds to            
Sales (SDI)            
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
October   Sept  
2013 2012 2011 2013 2012 2011
# of Sales 180 146 167 119 125 165
# of Expireds 76 167 130 100 162 145
# of Terminated 49 107 87 54 117 134
Ratio of Expireds
& terminateds to
Sales (SDI)
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