Forsyth County GA Real Estate Market Statistics - Tim Renshaw, Realtor

Forsyth County GA Real Estate Market Statistics

The following charts show data from January 2007 – Most recent month from First MLS (FMLS). This data is for properties in Forsyth County, GA of the following types:

Forsyth County GA Real Estate Market Statistics - Tim Renshaw RealtorResidential Detached Properties

Residential Attached Properties

Land / Farm Properties

Residential Developed Lots

Click the title text which is a link to a full-size, interactive graph of each respective statistic for Forsyth County, GA. As you click through the various charts of interest remember that you can:

Click / Tap a data point in the graph to get the exact value.

Click / Tap the line next to the year in the legend to highlight the entire line for easing comparisons.

Inventory / Sales Ratio vs. Sales Price Rolling 12 Month Averages

The Inventory / Sales Ratio provides an indicator of the supply / demand condition in the real estate market. The larger the Inventory / Sales Ratio, the more relative supply there is of homes for sale than homes selling. Comparing the Inventory / Sales Ratio to Sales Prices shows that there is a predictive element in tracking the Inventory / Sales Ratio as the trend of the ratio moves ahead of moves in prices. This makes sense as greater relative demand leads to higher prices and vice versa. Additionally, an Inventory / Sales Ratio tipping point can be seen. For Forsyth County it appears that the tipping point is an Inventory / Sales Ratio around 11 (green line). This is the Ratio point at which prices stopped falling and began to stabilize even as the Ratio continued to fall. This chart uses a rolling 12 month average to smooth out the graph for better visibility of the trends.

What does this mean for Forsyth County Buyers? As the Inventory / Sales Ratio remains low, homes purchased today should have appreciation opportunity from an investment standpoint and given the leading indicator element of the Ratio, this opportunity should remain for some period of time even after the Ratio ticks up a bit until say the Ratio hits 6 (orange line). Read on for more and particularly the section “Massive Market Events Destroy Trend Charts!” for a discussion of the weaknesses of “leading indicators” in massive market events.

What does this mean for Forsyth County Sellers? Now is a great time to sell your house as prices have recovered so significantly since the downturn. this should also remain the case for the near term given the high relative demand for homes vs. the number of homes available.

Let’s look at this in further depth using this chart for further explanation. The low ratio and resulting higher prices continued strongly through the end of 2016.

(Click link for current updated chart through December 2016)

Sale Price vs. Inventory / Sales Ratio Explanation Graphic

Click to enlarge

Note that as the Inventory / Sales Ratio (blue line) climbed through to its peak in January 2011 of 14.5, Sales prices (red line) fell at an equally fast rate. Additionally, even as the Ratio fell back to around 11, prices continued to fall, note however, that the rate at which Prices fell slowed and the red line begins to flatten a bit until December 2011. At that point, when the Ratio fell below 11 (green line) [A], prices began to pick up a bit [A] though not strongly until September 2012 at which point prices have headed up quite strongly [B] as the Inventory / Sales Ratio continues to fall. This gives an indication that the Inventory / Sales Ratio is a leading indicator of home prices in the future.

Another indication of this correlation can be seen in the time period from October 2013 to December 2014 [C]  where the Inventory / Sales Ratio flattened out around 6 (orange line). Now notice the slight flattening of the increase in the Average Price (red line) from October 2014 to September 2015 [C]. That is a lag of about 1 year between the market response of Prices after the Ratio trend. This again shows a predictive element in looking at the Inventory / Sales Ratio as a guide as to where prices are headed in the future. Also note that while the Ratio remained fairly constant prices did continue to rise. This is because the Ratio as a measure of the supply / demand balance remained low, meaning that supply was and remains low relative to demand. Consequently, it is reasonable to expect prices to continue to rise until such time as the Ratio increases (i.e. the blue line moves back up).

Massive Market Events Destroy Trend Charts! To be clear, this is a general indication and not something that can be used to glean precise timing on a month to month or even quarter to quarter basis. For example just because the Inventory / Sales Ratio falls this month, doesn’t mean that in 3 months prices will be higher. We all have experienced the volatility of events inside and outside the real estate market to know that things can change drastically in a short period of time. This can be seen in the early part of the chart above. Note that the Ratio remained low and only slowly began to tick up until October 2008, but prices had already begun to fall. This is a great example of how large market events such as the financial crisis starting in 2007 can change things quickly and blow up everyone’s expectations! By 2008, there was enough bad news and awareness that there was a huge problem in the real estate and overall financial markets that financing for buyers became very difficult and buyers in general got more skittish about making a move in the midst of financial turmoil. Consequently, demand fell even extremely fast and a glut of homes on the market had to reduce prices in a hurry to sell. Personally, my wife and I were blessed by just such a rapid market change and were able to buy our current house for 30% less than the original list price in May 2008.

Close Price to List Price Ratio

The ratio of the final closing sales price relative to the list price at the time the final offer was made. Gives an indication of the market balance tipped in favor of sellers or buyers.

Close Price to Original List Price Ratio

The ratio of the final closing sales price relative to the original list price when the property was initially listed. Note this does not take into account previous listings that may have expired or been withdrawn at different prices, just the price change activity of that final listing that successfully sold and closed. Gives an indication of the market balance tipped in favor of sellers or buyers. Good to compare this with Close to List Price Ratio above as the closer these are, the stronger the indication of both expectations of sellers and realtors when they first listed vs. how the pricing that “worked” in getting the sale.

Months of Inventory

This is how many months of inventory are available. A healthy inventory level is generally considered 5-6 months. This calculation shows how long the current number of homes for sale would take to sell if they sold at the same rate as the number of homes sold that month. Simple example, if there are 30 homes in a neighborhood for sale in June and 10 sold in June, that is 3 months of inventory. Rule of thumb, below 5 months is more or less a seller’s market and over 6 months is more or less a buyer’s market.

Days to Sell Average

Simple enough, the average number of days it takes a property to go from listing to selling. Gives a sense of the relative strength of the market and gives an indication of the supply and demand mix.

Number of Active Listings

The number of property listings that were available / active in any given month. Gives a sense of the relative supply over time.

Number of Expired Listings

The number of listings that expired in any given month. Expired means that a listing contract signed between the seller and agent of whatever length went through the entire contract period without selling. Good for comparison with Active Listings, Sales $ Volume, Sales Price Average and Close to List Price ratio to get a sense of how well properties are moving at the price points listed.

Number of New Listings

Straightforward statistic to show relative supply over time.

Sales $ Volume

The total dollar value of homes sole in any given month. Shows relative strength of sales over time. Note that this number tends to be under-reported when first published by FMLS and then increases as closed deals get recorded. This number can increase significantly over the 60 days following the end of a month’s report.

Sales Price Average

Shows the relative strength of sales prices over time. Remember difference between average and median calculation: Average is all sales total divided by number of properties. Median is the sales price where half the number of properties are above that number and half are below that point.

Sales Price Median

Shows the relative strength of sales prices over time. Remember difference between average and median calculation: Average is all sales total divided by number of properties. Median is the sales price where half the number of properties are above that number and half are below that point.