Do listings expire because of price
While taking a quick look at the month end data and getting ready to reformat the monthly sales reports, I discovered some fascinating trends with expired listings.
A quick note, expired listings are homes that were put on the market and did not sell before the listing period expired, normally agents take listings for a minimum of 6 months, some a little shorter and a few a little longer but when you look at the days on market (DOM) for an expired listing showing 190 days, that's about 6 months.
Expired listings are different than withdrawn listings, withdrawns could be sellers who have given up on their selling plans, fired their agent because the house didn't sell and re-listed with another (that's a subject for another post on another day) or the agent did a little creative work and simply re-listed the home to get a fresh MLS number or start the clock over for days on the market.
Let's put the numbers up first, do a little analysis after.
Jan expired 254 Avg list price $490,397 Median list price $287,250 DOM 190
Jan sold 708 Avg list price $330,673 Median list price $318,268 DOM 81
Jan actives 8607 Avg list price $488,842 Median list price $275,000 DOM 122
At first glance, homes that sold in January were on the market for 50% less time and 33% less time than the currently active homes. Next, the average price of homes that sold was significantly less than either expired listings and currently active listings but the median price was actually higher than either which indicates that it wasn't just inexpensive homes that sold but high priced homes as well. 254 houses did not sell and the listing expired compared to 708 homes that sold. That is more than 35% available that did not sell and in my opinion, it likely was priced too high.
Bottom line, priced right, a home will sell, priced too high, it likely will expire unsold and based on the trends the above numbers are indicating, many of the 8607 active homes may do exactly that.
What is the solution? For sellers, a reality check is in order. You are competing with 8607 other homes for 700 buyers (admittedly, that is a low estimate of the number of potential buyers out there because January and February are generally slow months for closings because home shopping declines during the last 6 weeks of the year so let's be optimistic and say, there are 1000 to 1250 potential buyers out there. That is still a ratio of 7 or 8.5 homes available for every potential buyer. Not very good odds if you are selling but a wonderful opportunity for buyers. And all of this is occurring when my web traffic statistics for January is showing large increases in the numbers of unique visitors, most likely due to home buyers interested in buying low due to the housing slowdown.
It doesn't matter if you neighbor is pricing his/her house at the top of the market and you think your home is bigger, better and worth more, the for sale sign will still be in your neighbor's yard long after you have left the attorney's office with your check, the moving van has pulled up and you are on your way to your new home. If you want to sell during the spring season in Charleston, you will have to price your home realistically to the market. If you don't, other sellers will and that's where the buyers will be shopping.
Finally, let's say you don't quite get top dollar for your home. The bright side of that is that you won't be paying top dollar for your next home either. After all, there are 8607 available properties and I'm sure a few would be very nice to live in and you'll be able to buy just the one you want for a very reasonable price. (By the way, under no condition will you be able to "steal" a home, there is always fair value and no matter how motivated a seller is, it's unrealistic to expect that you will be able to purchase a home worth $488,000 for $318,000.)