Right now, the market is something of a mixed bag. There is good news mixed with some trends that show the future might not be so bright. The bottom segment of the market has softened a quite a bit. That has given us an 18% increase in median selling values. While units are down over the record year of 2006, we are still trending up over the last five years.
But the inventory is growing, especially high end. There is Over a years worth of properties over $200k I wrote more listing contracts this week than in any single week since I began practicing real estate. In addition, the number of FSBO's available is the highest I have seen. And now we had the announcement that there will be another several hundred jobs leaving the market.
During a time inventories are climbing, my average days on market has gone way down. I am asking clients if they want to sell or want to let is languish out there for 6 months or more. I have lost a couple of listings because of it, but my last three were on the market for 80, 36, and 28 days respectively (MLS average is 125 DOM). The one that is overpriced is @ 70 days and not being shown. Fortunately the bank is talking short sale with us on the one over priced.
This past week end I noticed that our "hotsheet" had more price reductions every day of the week than new listings. A quick glance of properties that have had reductions showed that about 46% of all active listings have had a price reduction. If we consider that the most interest for a home occurs in the first three to four weeks, we see that we have needlessly extended the selling period by over pricing our listings. We have done our clients a disservice and perhaps "stigmatized" the home as "overpriced".
Pricing strategy will be key in the coming months. As we transition from a fairly balanced market to a buyers market, we will need to be sure we study the competition and price homes appropriately.
All that being said, Danville is still the most affordable MSA in Illinois. It is a good location for investors. The waterfront properties and small farms also make great week end and vacation retreats.