Home Listings: Only Half of Last Year's Have Sold
Although Redfin found that 53 percent of the listings it tracked, in counties located around Chicago, Atlanta, Seattle, Los Angeles, San Francisco, Phoenix and Boston, had not sold after a year, those numbers do not represent actual homes sold. The data tracks a listing, not a property.
Say, for example, that two homes in one county went up for sale. One stayed listed on the market 12 months straight before it sold, but the other went on and off the market three times during the same 12 months before it sold, Redfin's data would count that as a total of four listings for the county with a success rate of 50 percent (two out of four listings resulted in sales.)
Rather than a measure of how quickly homes are selling or how many sold, Redfin's data, in effect, gives a look at the success rate of an agent to sell a home the first-time around, or basically how long it takes before a homeowner might give up and pull their home from the market to either do repairs, switch agents, or just come back on with a fresh start, by restarting the clock that tracks the number of days it's been on the market.
When homes don't sell in an expected period of time, quite a few sellers might blame their agent (rather than their own pricing or how tidy they keep their homes) and thus they switch to a different real estate agent. From the next realty agent's perspective, that just might be a good thing.
"It is often not good to be the first agent sellers work with," Redfin CEO Glenn Kelman told HousingWatch in a phone interview. "It is a well-established tactic for agents to call an owner whose listing has expired, because you catch a customer on the rebound when they are more practical about pricing and just more accommodating. They had to learn through hard experience that their home is worth less than they thought."
Duffy Realty of Atlanta and author of "Avoiding Buyer Remorse," who says that there's a saying explaining it: "In life you want to be the first-born child, the second wife and the third real estate agent because the first-born is spoiled, the first wife trained him for you, and as the third real estate agent you have the best opportunity to sell the place, because the owners are either beaten down or finally serious about selling."
Duffy and Kelman both do, however, place partial blame on some of the real estate agents who haven't moved into the 21st Century. For example, Kelman points to the low-quality photography in listings, while Duffy says that pricing homes on the nines, at psychological points just under big number milestones ($124,900, 249,900, 499,900, etc.), is old school, because a home can get more exposure if it is priced on a round number, like $300,000.
But regardless of where the blame lies as to why a home doesn't sell right away, buyers do find properties they want. The number of days on market for a single listing falls just shy of three months, according to the National Association of Realtors.
"Our consumer survey data shows the median selling time in 2009 was 10 weeks," says Walt Molony, spokesperson for the NAR. "Based on inventory supply data, it was about 9 weeks in July versus about 9.5 weeks in July 2009. Homes that stay on the market for significantly longer than that could be in an economically depressed area, have serious problems or simply are overpriced."
Or the sellers just didn't think to re-list. Even NAR data can be misleading to those who don't closely follow the industry. The NAR looks at the number of "days on market" before a home sells, and does not account for the total time that a home may have spent on the market if it goes off for a few weeks before re-listing, as is the case with a home in my neighborhood. That five-bedroom single-story home in Minnetonka, Minn., has been on the market for 30 days, according to a report pulled today. However, the owners actually have been trying to sell this home on a cul-de-sac since 2007. It has been on and off the market at various price points at least eight times, with a couple of different brokers, for nearly four years, although other homes around it sold in much shorter time-frames under a single listing.
Although Redfin's data do not weed out the multiple re-listers from those homeowners who are still on their first original listing, most listings take six months to expire, says Kelman. Thus the company's report still shows that in seven of the nation's major housing markets less than half of all sellers in the past year sold their home on the first try.
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