Home sales in 30 days or less vs. a year-plus
Just over a quarter of the Baltimore-area homes that changed hands in April got under contract in 30 days or less -- about 540 in all. That's a lot more than the number of sales that took at least a year (115, or 6 percent).
Here's what the stats don't say but I'd like to know: How many of the homes that haven't sold yet have languished for upwards of a year? Or have bounced on and off the market as their owners test the waters with no success?
I frequently hear from real estate agents that the first few weeks are critical for a seller. Price the home competitively right off the bat, put it on the market in good condition, make sure you have tons of photos online, etc., and your odds of buyer interest are pretty good -- or at least as good as you can make it given that demand for your neighborhood is mostly outside your control. But what about the homes whose sellers (and/or agents) don't get it right from the get-go and have to adjust course a month or three later?
One way of reading the sales statistics is that it gets progressively harder to sell:
| Days on market | # sold | % of total |
|---|---|---|
| 30 days or less | 539 | 27% |
| 31 to 60 | 235 | 12% |
| 61 to 90 | 194 | 10% |
| 91 to 120 | 172 | 9% |
| 121 to 180 | 302 | 15% |
| 181 to 360 | 443 | 22% |
| 361 to 720 | 100 | 5% |
| 721 days or more | 15 | 1% |
| TOTAL | 2,000 |
Source: Metropolitan Regional Information Systems' RealEstate Business Intelligence. Baltimore metro area statistics include Anne Arundel County, Baltimore City, Baltimore County, Carroll County, Harford County and Howard County.
The share of total sales does tick up for the 121-to-180 and 181-to-360 categories, but keep in mind that both are multiple months -- and each has a smaller piece of the pie than the 30-days-or-less group.
One of the tricky things about days-on-market statistics, though, is that you can pull your home off the market, wait for a while and get back on with a restarted clock. Odds are that some of the homes selling quickly in April had been listed last year to no avail and came back later with a lower price, better amenities and/or more aggressive marketing.
When I wrote in February about some homes selling speedily and others sitting forever, Wonk reader fronesis said 10 months of searching for a home really emphasized this either-or pattern: "I think this 'super quick and very slow' phenomenon is a product of a falling market in which prices going down are sticky. Even though the market is now leveling off, there are still tons of homes that are overpriced. The ones that are priced right, go quickly; the others just sit there.
"And here's what exacerbates the phenomenon: if a home STARTS off overpriced, then it will take longer to sell, EVEN AFTER the price is lowered to a fair market price."
Just in case you're wondering: 70 percent of Baltimore-area homes sold in April 2005 -- near the peak of the frenzy -- went in a month or less. If you couldn't sell quickly in those days, you were really doing something wrong.
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Comments
I wish new buyers in a neighborhood could comment on current listings to let RE agents and sellers know why their property is not moving. I have a lot to say to the very similar comparable listings that have popped up in my neighborhood.
I bought a foreclosure at about $40,000 less than current listing prices and can still afford put in $20,000 in upgrades...not repairs. I'd still be much better than the current listings because I have A/C, upgraded plumbing and electrical, new gutters, newer windows, and updated baths and kitchen. No one wants to pay top dollar and still not have a dishwasher nor A/C and have to remove frilly wallpaper. Adding central hvac and ducting when no other major reno needs to be done is a pain. Could someone please let these sellers know this?!
Posted by: cine | May 25, 2011 10:41 AM
Properties where the owner NEEDS to sell and properties where the owner (whoever that may be) WANTS to sell enough that they will price them correctly to their market... sell and sell quickly.
It really isn't that complicated.
Posted by: MrRational | May 25, 2011 12:10 PM
@ Cine- Your agent CAN post comments to sellers of homes that you looked at, through the online scheduling service. Sadly, most don't bother, so we sellers have no idea what the buyers who looked at the house thought, or would have liked to suggest to us.
Posted by: Gamthin | May 25, 2011 5:14 PM
Would a "What am I doing wrong?" feature here for sellers with homes languishing on the market be useful?
Posted by: Jamie Smith Hopkins | May 25, 2011 5:23 PM
Would a "What am I doing wrong?" feature here for sellers with homes languishing on the market be useful?
Probably not; as the information is readily available to those even remotely inclined to look for it.
Clearly, it is understood and acted upon by some; perhaps even most. The balance are either oblivious to the saturation extant or are being deliberately obtuse about applying same.
There's not much hope for either of these two latter groups I'm afraid though it might be interesting to quantify how many that allege they are RE professionals fall into those two categories.
Myself, I'm a RE amateur.
Posted by: MrRational | May 25, 2011 10:59 PM
Jamie,
I think a "What am I doing wrong" feature is a great idea. Although it might seem like common sense to certain people, some sellers need really specific guidance about helping a home look as good as it can. A certain percentage of homeowners just don't naturally "get" or have the vision for design and showing condition issues. Also, many sellers actually reject showing requests because the time is not convenient for them - that never ceases to amaze me!
Correct list price is harder, I find that many people just can't afford to price their house where it should be due to their mortgage balance. The decisions and consequences are much more complicated in that respect.
Posted by: Tina | May 26, 2011 1:11 PM
Jamie, a "what am I doing wrong" post probably wouldn't help most people with a house on the market a long time. Either they're not taking selling seriously or they're delusional. Because, as someone else says, all the information you need is out there. 1) Remove clutter; put excess furniture or personal items into storage or into a shed/garage. 2) Invest a few percent (2-3%) of your likely sale price into addressing some nagging problems with the property. 3) List at a realistic price, because the most attention you'll get for the house will come from when you FIRST list it. 4) In a buyers' market, get "ahead" of falling prices by making realistic counter offers to buyers and be willing to make concessions on price.
If you plan to do no work or very little work and still get anything approaching the price your house would've sold for a few years ago, why bother going through the motions?
Posted by: chappy10 | May 27, 2011 2:30 AM
You make a very good point about pricing your home. It is a market with enough inventory that buyers know or quickly learn what is a fair price. So buy pricing you home right from the start you can lead the market and not chase the market by lowering the price after a few weeks or months for sale.
Posted by: Paul | May 30, 2011 11:56 AM