Inside FX Buyer Intensity


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  • Fairfax County Buyer Intensity Index
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    March 15, 2006

    Fairfax County Buyer Intensity Index

    by Merv on Wednesday, March 15, 2006 at 06:05 AM | [0] Comments [0] Blog links
    The Fairfax Buyer Intensity Index (Fairfax BII) is simply an indicator of buyer intensity at any point in time (monthly). Positive index values means more property is being sold than there are active listings. Negative index values means fewer properties are being sold when compared to total active listings. Values close to zero indicates a relatively balanced market; number sold is close to number active. An out of balance condition exists when the difference between sold and active is greater than 25% of the number of actives or when the difference is less than 20% of the number of total actives. Hover on data points to view values.
    RED Columns: HOT - Strong Seller Market, buyers need to be aggressive.
    BLUE Columns: COLD - Strong Buyer Market, buyers can be selective and negotiate.
    Gray Columns: Balanced Market, buyers and sellers are on equal footing.

    The Fairfax BII is an adaptation of Nate Summer's Marin Market HEAT Index™. He describes it as

    "an indicator of the intensity of buyer competition for listed residential properties at the current time, a snapshot of conditions. Higher numbers indicate more buyer competition for each home on the market; lower numbers mean less intense, lower levels of buyer competition for each listed home. This measure includes single family homes and condominiums (other types of real estate are excluded)."

    Our modification gives an index value of positive and negative numbers that makes it visually more intuitive. Note the following:
    • The initial Fairfax BII includes all single family property types (detached, townhouses, and new construction).
    • New construction data is historically unreliable as entries into the MLS are often made after settlement (never appear as active). Future indexes will exclude these.
    • The Fairfax BII thresholds are +0.25 (red columns) and -0.2 (green columns) respectively. A balanced market is indicated by the gray columns.
    • We include the two lines on the chart above to illustrate the relationship of SOLDS to ACTIVES.
    • The Marin Market HEAT Index is a trade mark of Nate Summer.

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