I've been getting a lot of calls in the past week or so from concerned homeowners in Cheverly about a mailed report that there were no settlements in the month of July.

The mailing was correct - no settlements were recorded in our Multiple Listing Service for July, but  that only tells part of the story. (Actually, there was one settlement in July, but it wasn't posted until well into August.)

I have long believed that reporting properties sold in a given month does not give an accurate snapshot of the market. Here's why: let's pretend that two properties settled in July. The first was a 30 day contract - it was accepted at the end of June and settled at the end of July. This one reflects the market in late June. The second one was accepted in mid-February and also settled at the end of July. Was the February market different than the June market? Yes. For one, in February there were only 27 homes on the market, while in June we had 37. So even though our pretend world has had 2 settlements in July, this fact doesn't actually tell us anything about the market for that month.

Since 2001, I've tracked the number of contracts written per month as opposed to the number of settlements per month. Recently the National Association of REALTORS has begun tracking statistics the same way and for the same reason. Contracts written in the same month, and not the number of properties that have gone to settlement, reflect the actual activity of that month.

Back to the real world.

The recent postcard that showed no settlements for the month of July does not, in my opinion, reflect the July market. In July, 5 contracts were written. So buyers were actually out there in July, shopping for homes and buying properties. Whether or not they will all survive the home inspection / mortgage / appraisal process remains to be seen.

Interestingly, of the 5 contracts written, only 2 were non-distress sales. Meaning they weren't estate sales, pre-foreclosure or short sales, or outright foreclosures.

It's still interesting to see what settles because we all like to see what properties sell for. They just aren't a good reflection of the activity for any given month.

(C) Susan Pruden.