Good news, bad news for Baltimore-area housing market
Here's the good news/bad news for the Baltimore region's housing market in June (with emoticons!):
:-D The month was the biggest June in four years for the number of new contracts signed
:-( But it's still way smaller than during the other Junes in the aughts
:-( or :-D (depending on your perspective) Average prices were down 7 percent vs. a year earlier
:-( And the number of home sales that closed in June -- as opposed to contracts signed, which will likely settle in July or August -- hit its lowest level in at least 13 years
:-D On the upside for sellers, competition was waning, with 7 percent fewer homes on the market than a year earlier
:-( But there's a lot of homes that could end up on the market later, courtesy foreclosure
Here's the full story, emoticon-less.
If you like to splash about in raw data, and who doesn't, you can find it at RealEstate Business Intelligence, the stats arm of Metropolitan Regional Information Systems.
One of the themes of this extended housing bust is "pent up" -- as in demand and supply. People who want to buy but are holding off because of volatility (or tighter mortgage rules or job uncertainty or any number of issues). Homeowners who want to sell but are hoping things will improve if they wait.
Is this you? Or are you a former pent-upper?
One of the real estate agents I talked with for the story, Azam Khan of Long & Foster, is seeing more activity and attributes it to fence-sitting market-watchers turning into buyers and sellers.
"People have been sitting around for the last three years, wondering, 'Should we list our house, should we not list, should we buy, shouldn't we buy?' And now it’s like, 'OK, let's do it,'" he said. "They've waited so long. It’s almost a whole cycle. You imagine people stay in their house for four years, maybe five. They've already done three years, three-plus years of this waiting and nothing happening. ... People have to sell because they get married, they have kids, they need to move for school districts or they're being relocated. And I'm seeing that happen more."
Here's what I wonder: If you line up all the prospective buyers and sellers who are still waiting, which group would be bigger -- and by how much?
On a side note, here are the links to the other statistical reports I mention in the news story:
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Comments
Sellers would be the larger group by leaps and bounds.
Lots of buyers happy to wait another 6 months and pick off the lower winter prices or wait a full yr (or more) until another 10% drop. Financially speaking, it's absolutely the right move. Prices will be lower next yr in nominal terms and when you consider inflation, even lower.
Posted by: chappy10 | July 13, 2011 12:48 AM
What's worse even (for future sellers) is that current sellers are ones who absolutely must sell for whatever reason or they would not go on the market now. Given this, they must sell at almost any price so don't represent a "normal" sale price. These will be the comps for future sellers...ugh!!
Posted by: lisa | July 13, 2011 11:06 AM
Lisa has a good point. Of the ~60-70 houses we looked at in 2010 before buying, only about 5 or 6 have sold in that period of about 14 months. At least 10 or 15 of them have gone off the market entirely, while another handful have become rentals (could be more, but we only know of 5 that are clearly rented out now). In other words, more houses are ending up as temporary rentals or have been pulled off the market. It's a "wait and see" strategy. Most of these houses had significant price drops while still on the market, but still didn't get much interest or had delusional expectations on price. So... the "x months of supply" line you hear? It's not scientific, by any means. A lot of people *would* sell, but are unhappily stuck where they are.
Added fact: Letting your listing expire and having your home off the market for 90 days means that your next RE agent can list the house on the MLS as a new property... future buyers won't see that the house was on the market for 250, 350, 450 days... it will re-start as a new listing. I don't think this helps that much, but it does hide this fact from unsuspecting buyers. Usually when you see a house has been on the market a long time, you ask "what's wrong with it?" and just assume the price is too high. It can scare away buyers. But in the end, I doubt the yo-yo of having your property on and off the market really helps get a better price in the end.
Posted by: chappy10 | July 13, 2011 7:40 PM