In the palm of your hands, or on the screen of your favorite device, you may be holding one of our Nest Realty Real Estate Market Reports. We pour over mounds of data, both nationally and locally to bring you, our clients, the most useful information. But what do these numbers actually represent and how can they be useful and relevant to you? Read on for further clarification…
Let’s take a look at a graph from our 2022 Annual Report for Charlottesville, Virginia.
Two of the most important and easiest to understand numbers when looking at real estate data are Average Price and Total Sales. The chart above gives us a glimpse at the last five years for all real estate transactions that occurred in the Charlottesville metropolitan area, and includes all brokerages (not just Nest Realty).
On the left, the average price ranges from $300,000 to $500,000. The green dots represent the average price for each year, and we see a steady increase from 2018-2022, with the averages sales price increasing from $455,485 in 2021 to $515,485 in 2022. This translates to a 13.2% increase.
Looking at the pale green columns and the numbers on the right hand side, we can see the total number of sales over each of the last five years. We see a steady climb in from 2018-2021, then a drop in 2022, when the total sales dropped from 4,130 in 2021 to 3,710 in 2022. This translates to a 10.2.% decrease.
Looking at these two numbers overlaid helps us to view if there is a correlation between the two: how the price may effect the overall sales, or not.
Let’s take a look at another graph from Wilmington, North Carolina:
Let’s start at the top. The Average Year Homes Built gives us an overall impression of the average age of homes sold in the region over the last five years. This represents the age of homes an average buyer is likely to find available to them. In historic areas like Fredericksburg, Virginia, this number may be much older versus an area like Phoenix, Arizona, where there are many neighborhoods with newer developments.
Next the % of Homes Less Than 5 Years Old gives us a more precise look at the number of homes with newer construction. In this case, 20% of the homes sold in the Wilmington area in the last five years were built since 2018, where 80% of the homes sold were built before 2018.
The Average Detached Sq. Ft. tell us the average size of a single-family home. The Average Attached Sq. Ft. looks at condos, townhomes, and duplexes.
Moving down, we again see the same graph on the left that gives us a snapshot of the last five year’s worth of Average Price and Total Sales. The chart on the right digs a bit deeper into these details. Looking at the top dark teal banner, we can see that we are comparing the previous year, the current year, and the percentage of change between the two, then a triangle to indicate if this number is “trending” up or down.
We can now look at five bits of comparable data: Total Sales, Price per Sq. Ft., Days on Market, Avg. Sales Price, and Total Volume. We’ve discussed the Total Sales and Avg. Sales Price above.
The Price per Sq. Ft. allows us to compare the price of buying a home without regard to its size. Using this the price per square foot number provides a clear comparison of 1,500 sq. ft. starter homes with 4,500 sq. ft. estate properties.
The Days on Market tabulates the number of calendar days from when a listing went “live” on the MLS to the day that an offer was accepted, and the home “went under contract.” This number is interesting to watch. This tells us how quickly homes are moving on and off the market, indicating buyer demand. In 2022, this number dropped very low as buyers were placing offers on the spot, or sight-unseen. As mortgage rates began to rise in 2022, we saw this Days on Market Number begin to rise again and return to a more normal level. For most of the areas in our Nest sphere, we saw this number drastically declining. Meaning, homes were selling faster than ever before.
In the bottom row, Total Volume tallies the total dollar amount of residential real estate transactions that occurred in the area for the entire calendar year. This includes any and all brokerages, and tallies each transaction just once.
Eager to learn more about what this data means for you and your real estate goals? Reach out to your Nest agent. We dig data, and we love delving into deeper conversations.