(January - August 2007)
DAYS ON MARKET go up and prices go down when new listings outpace new contracts for homes, as we've seen throughout 2007 in Anne Arundel County MD. The explanation is simple - supply and demand. Housing inventory simply exceeds the number of qualified buyers in the marketplace.
No turn-around in this situation is anticipated soon, unfortunately, since issues surfaced during August in the mortgage industry which resulted in the tightening of credit qualifications for homebuyers. Many lenders literally closed their doors and others severely restricted their loan programs. Popular "no-money down" conventional loans may now be history, eliminating a large percentage of prospective home buyers from the market at a time when housing inventory already exceeded buyers.
As you can see from the chart, days on market peaked during the first three months of this year and saw a gradual decline after that until this mortgage crisis in August precipitated a slight rise. I suspect we'll see a greater increase as the full effect of the mortgage situation is felt.
WHAT DOES THIS MEAN TO YOU? On the average, homes are taking longer to sell this year than they did in 2006. The "right" price is the key to selling your home at all, let alone in the shortest possible time. Today is no time for you to "test the market" at a higher than realistic price!
Source: Metropolitan Regional Information Systems, Inc. (MRIS). Chart by Margaret Woda. All information deemed reliable but not guaranteed.
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The only factors that govern the sellability of a home is Price Price and Price. Although condition and location will play a role if allowed to. The key for every seller to understand is th absorbtion rate. If there are 100 like homes for sale and only 50 participating buyers for those homes you could sit back and hope to be one of the lucky ones 50/50. Or you could move up your odds with price.
Nice post topic seems to be on everyones mind.