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January 27, 2012

Fast home sales, slow home sales


Above: The homes that sold in the Baltimore region in December, organized by how quickly -- or slowly -- they went from listed to under contract.

The breakdowns come from Metropolitan Regional Information Systems' stats arm, RealEstate Business Intelligence, which notes that yes, some homes really do come on the multiple-listing service as already sold -- hence the 34 properties in December in the "zero days" category.

But it's rare that someone had to have the house so badly that they snagged it from the owners before they were even thinking of selling. It more likely was for sale but not on the MLS -- a new home, say, or a for-sale-by-owner -- and an agent entered it into the system afterward.

So let's ignore the zeros. If you add up everything from one day to 30, that's almost 400 homes, close to a quarter of all (non-zero-day) sales that month. That's by far the most common period for a home to sell, comparing just 30-day stretches.

To put it into perspective: 415 homes that sold in December -- not that many more than the 30-and-under group -- had been on the market more than six months. (Of those, 15 had been on the market more than two years.)

Newly listed homes are more likely to get attention. But that's not the only reason the sales stats show a sizable chunk of homes selling in the first 30 days. An owner might have been trying to sell for considerably longer but went on and off the market a few times before finally finding a buyer. (On that note: Here's an explanation of the difference between "days on market" and "days on market property," the latter of which does track the total number of days for sale over time.)

The most common selling point in the first 30 days in December: Day 11 through 20, according to RBI.

Buyers, do you find yourself focusing on the new stuff or do you keep an eye on older inventory for price drops?

Sellers, what was/is your pricing strategy at various lengths of time on market?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (7)
Categories: For sale, Housing stats


I dont know why anybody is buying anything these days. With 800 jobs at Northup gone, a bunch more at AAI and a hundred other defense contractors in the area soon to do the same thing- there will be a ton of homes on the market. For some reason, buyers think that a house that sold for 225k in 2000, that sold for 480k in 2007 and is now listed at 420K is some kind of steal? Its a steal alright- for the suckers that are still taking the bait. Just within this decade, you had to be considerably well off to afford a 300k+ home but all you see are shacks in that price range now. What changed? Not our median incomes. The headwinds are going to continue to further pushes prices back where they should be. Anyone buying right now is catching a falling knife.

Agreed Elweedz...lot's of shadow inventory and home owners holding out for a rebound. Prices need to come down to pre bubble levels, not high mid bubble levels. I'm personally in a poisition to buy my first house, my credit is good, and I have plenty of liquid cash for a big downpayment, but I am keeping my powder dry until this market feels right.

elweedz it's not that simple. I'm bearish about housing, but if you think of a house as a place to live where you plan on staying for 10-15+ years, why wouldn't you buy right now? Interest rates are not going much lower. And generally, if nobody wants to touch an asset class, it's probably a pretty safe time to buy into it (eg- stocks in February 2009).

And it's hard to see home prices getting much lower from here in real dollars. Cost push inflation is ticking up fast no matter how you measure it, and home prices are deflating. Even in a stagflationary economy, home prices can't drop much further but rents and salaries will both go up.

The smart buyer will put as little $ down as possible to hedge against inflationary or deflationary outcomes in our economy by keeping that money in their bank account. That's between 3.5 - 5% these days.

As a home buyer and a home seller, my opinion is the data is teaching us 2 lessons.

#1, Buyers are factoring in cost to update a home when making offers. You wouldn't believe how many sellers haven't made a single major update since before the year 2000 & feel the interior condition of their home has no bearing on the time it will sit on the market, or the price buyers are willing to pay. If you're the nicest home on the block and you price right, your house will close in less than 30 days. If you price for the nicest home on the block and your builder grade kitchens and bathrooms are the same as it was in 1989, you need to adjust your listing price.

#2 Falling prices in a market with few homes for sale is a sign of a housing depression. This has happened repeatedly in the last 100 years globally - when many can't afford to sell, and the comps are few and far between (and as the case locally, many comps are short sales and foreclosures) then you don't have a market, because lack of transactions means buyers and sellers don't perceive value the same in a market, and neither will budge off their positions. Prices in Japan fell 85% from their peak in the 80s, despite their government like ours responding to the crisis with 0% interest rates and a flood of liquidity which has in Japan lasted for decades.

Fitzy - was a well crafted response until your last statement "Prices in Japan fell 85% from their peak in the 80s, despite their government like ours responding to the crisis with 0% interest rates and a flood of liquidity which has in Japan lasted for decades."
What makes us any different? If 0% interest rates cant spur buying, what in gods green earth would happen to this market if interest rates rise (and they will). Sooner or later rates have to go up. Give me one good indicator that incomes will rise?
While the vernacular of your response indicates that you are higher educated than your run of the mill realtor, the spirit of your message smells like one.

Josh Dowlut has surmised on here before about how the 30 year mortgage was the downfall of homeownership (channeling Jaime to find that post). Why on earth do folks need a 30 year? To stretch out payments and allow them to borrow more? If this wasn’t available, it would drive prices down and stop the debt slave cycle. What is wrong with this scenario?

elweez my point is that by hook or crook, the borrowing costs are so low for qualified borrowers, why wouldn't you buy now? If someone wants to give me money at 0%, I'll take it. Could be at a place like best buy - if you'll let me buy a macbook air for 0% for 24 months, why would I pay cash up front? I'll stuff it somewhere and even if it earns 1% I'll wait to pay the bill and collect the interest.

WRT to income, the economy is in transition. Not everyone is having a tough go of things. My personal income is up 30% from where it was in 2009 and I work for a F500 company who is usually stingy. I wouldn't want to be a doctor in ohio or a factory worker in south carolina, though.

you neglect to consider the reason why rates would rise in the first place. rising rates either are an indicator the economy is growing too fast in which case prices and wages and housing demand would also be up. The only other reason I can imagine is every sovereign nation starts dumping dollars, sending costs of everything up, which would result in wage increases as in the late 70s.

the 30 year is not a bad thing. not having to put down 20% and flawed underwriting models which don't consider a buyer's FUTURE ability to repay their note are the problem.

we're different than japan because the US is a net importer and we're dependent on sale of treasuries to fund operations, while japan is a net exporter and they always have a currency surplus.

so given that, i stand by my point. if you can afford a home and you are going to stay put and have steady employment, it's a good time to buy. just don't spend more than you can afford, and unless you're uncomfortable taking 30 years to pay down your loan put down as little as possible.

I have been looking at properties in Baltimore metro area for about three months. I have been raising my price level from $250K to $400K and I still am not finding any homes that are in "move-in" condition and updated. Most need at least $50K worth of work even to my inexpert eye. I am restricting my searches to single-story, detached homes with public utilities. I would estimate that 90% of the homes I am shown are vacant and have been neglected for the better part of a decade.
Is Baltimore housing in this much trouble?

di36464 speaks the the truth.

Until that changes people will continue to buy expensive homes and the buyer/seller middle finger standoff will continue.

I'm ok with that though. More standoff time means higher rent. BOOYAH

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie

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