“Homes are not selling” is a narrative that seems to be a little exaggerated. Months of supply has been constant year over year and median days on market is 6 days more for SFH and 8 days for condos. The number of homes sold are also up yoy. The number of homes for sale are up 15% yoy which could explain why houses are in the market for slightly more, but I am yet to see a concrete measure that suggests homes are not selling.
The median sale price is also slightly up for SFH and slightly lower for condos/townhomes yoy. Seems to me that a lot of these articles are low information clickbait’s.
I'm in the market right now. Anecdotally, it seems like there's more inventory available today than at any time in recent memory, but attractive properties still sell fast while loser properties pile up.
I'm not quite sure what the underlying explanation is. Perhaps there's a class of sellers that bought or refinanced at low rates and high valuations and now that rates are up and valuations have slid they can't find buyers that will accept the previous high valuation.
Look at days listed. Any property will sell at the right price. After 90-120 days, it obvious the price is too high and the seller is not motivated to sell. The listing realtor will try to provide market guidance and advise to cut the price if needed, but humans can be emotional and irrational. Prices take the elevator up and the stairs down.
It’ll take time, but those who must sell will, and they’ll set the downward price momentum with comps.
As a buyer, look for bad realtors and use them. Many will screw over their vendor, and you can use that to your advantage as a buyer.
Sucks to be selling and as you have learnt, you need to corral your realtor or they will do what is financially sensible for themselves.
A realtor has a strong income incentive to get property sold at any price because their income increases a lot with each sale. So they want sales volume and velocity. They also want to reduce the time they waste for each property (especially open homes) and they want to reduce risks of no sale.
Example: a $1M home with a 3% fee. They would rather sell it at $900k and get their $27k commission quickly as possible, rather than use a riskier strategy plus waste more of their time to try and sell at $1.1M to get $33k commission. If it takes them 2x the work to get a few percent more commission, their incentive is to do less work and sell 2x as many houses to get 100% more on commission.
If they were overleveraged, they’d be doing a short sale or foreclosure (if you’re underwater, a traditional sale is off the table unless you can bring the negative equity in cash to closing). Otherwise, you are spot on. Sellers who aren’t cutting prices don’t have to and can ask their “make me move” price, to your point, either because they have a low payment or low interest rate. In some cases, they turn into accidental landlords to get the cashflow instead of concede on price.
A land value tax would fix this. Instead of subsidizing vacant lots and car dealerships, we could just be building housing we already want on land we already have.
“Homes are not selling” is a narrative that seems to be a little exaggerated. Months of supply has been constant year over year and median days on market is 6 days more for SFH and 8 days for condos. The number of homes sold are also up yoy. The number of homes for sale are up 15% yoy which could explain why houses are in the market for slightly more, but I am yet to see a concrete measure that suggests homes are not selling.
The median sale price is also slightly up for SFH and slightly lower for condos/townhomes yoy. Seems to me that a lot of these articles are low information clickbait’s.
(All data available on redfin: https://www.redfin.com/us-housing-market)
I'm in the market right now. Anecdotally, it seems like there's more inventory available today than at any time in recent memory, but attractive properties still sell fast while loser properties pile up.
I'm not quite sure what the underlying explanation is. Perhaps there's a class of sellers that bought or refinanced at low rates and high valuations and now that rates are up and valuations have slid they can't find buyers that will accept the previous high valuation.
Look at days listed. Any property will sell at the right price. After 90-120 days, it obvious the price is too high and the seller is not motivated to sell. The listing realtor will try to provide market guidance and advise to cut the price if needed, but humans can be emotional and irrational. Prices take the elevator up and the stairs down.
It’ll take time, but those who must sell will, and they’ll set the downward price momentum with comps.
Given typical realtor behavior, I’m amazed any house is overpriced. Seems like they push sellers to sell below market and buyers to go above market.
I knew market prices well from doing my own property tax protests.
Our damn realtor strongly advised on a price close to $100k lower than we insisted.
House was in average condition and not recently updated. Said we were overpriced.
Multiple offers above closing on first day of listing.
Closing price was still significantly above asking.
Stupid damn realtor!
> Stupid damn realtor!
Not actually.
As a buyer, look for bad realtors and use them. Many will screw over their vendor, and you can use that to your advantage as a buyer.
Sucks to be selling and as you have learnt, you need to corral your realtor or they will do what is financially sensible for themselves.
A realtor has a strong income incentive to get property sold at any price because their income increases a lot with each sale. So they want sales volume and velocity. They also want to reduce the time they waste for each property (especially open homes) and they want to reduce risks of no sale.
Example: a $1M home with a 3% fee. They would rather sell it at $900k and get their $27k commission quickly as possible, rather than use a riskier strategy plus waste more of their time to try and sell at $1.1M to get $33k commission. If it takes them 2x the work to get a few percent more commission, their incentive is to do less work and sell 2x as many houses to get 100% more on commission.
This is from a mismatch in incentives and is well known.
The agents maximize their income by getting lots of quick sales. The seller maximizes their profit by being prepared to wait.
https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...
Yes. I know. I wonder if they persist in asking too much because they're overly leveraged. My second paragraph.
If they were overleveraged, they’d be doing a short sale or foreclosure (if you’re underwater, a traditional sale is off the table unless you can bring the negative equity in cash to closing). Otherwise, you are spot on. Sellers who aren’t cutting prices don’t have to and can ask their “make me move” price, to your point, either because they have a low payment or low interest rate. In some cases, they turn into accidental landlords to get the cashflow instead of concede on price.
Anecdotally, my neighbor's house has been on the market for eight (8) months.
Another down the street has been on the market for four (4) months.
This is a brand new development in a (previously) hot area.
https://archive.ph/8dted/
Over 100,000 homes sold per week the last couple months.
Homes not selling.
Could also be corporate buyers.
Also: of the human buyers, more are over 70 than under 35.
A land value tax would fix this. Instead of subsidizing vacant lots and car dealerships, we could just be building housing we already want on land we already have.
THe housing market is entirely synthetic due to corporate ownership.
Just stop measuring and I'm sure all these corporate influenced distortions will go away.
Stop measuring is the tune of modern America. Also, who needs to measure inflation, right?