Did you read Part 1 – St. Louis Sales Trends from 2001-2010
As we continue exploring the answer to “How is the St. Louis housing market doing?”, we need to consider 3 issues:
- how many homes are selling?
- how many homes are failing to sell?
- are prices climbing, falling or remaining flat?
We examined the first question in Part 1 of this series, plus we take another look at it below along with addressing how many homes are failing to sell.
How Many Homes are Selling…and How Many are Failing to Sell?
The charts below show the impact that the depressed housing market has had on the number of homes that have sold each year from 1999 to 2010.
In terms of supply & demand, fewer people buying homes means less demand and prices will remain low. Until more people start buying homes, the housing market won’t turn around.
Even more dramatic is the number of properties that failed to sell. Though the number of failed listings dropped in 2009, the trend reversed itself in 2010. The highest level of failed listings combined with the lowest number of properties selling in the last 10 years reflects that 2010 was a tough year for St. Louis sellers.
With over half of the the home sellers giving up or losing their home to foreclosure, simply putting a home on the market does not ensure a sale. Low demand combined with many options for the few home buyers out there means that only the homes priced appropriately for the features, condition and location will sell.
More Condos Fail to Sell than Single Family Homes:
The last few years have been hard on all St. Louis sellers, but condo owners have been harder hit than owners of single family homes.
There simply are not a lot of condos selling in today’s market.
The condo market also has a higher failure rate than single family homes.
In a market where 2/3 of listed condos will be taken off the market without selling, you can imagine the impact it has on pricing.
Condo owners who must sell (including banks who own foreclosed properties) will drop their price until they find a buyer. Anyone not willing to match the prices of the most motivated sellers will end up giving up without getting a contract offer.
The Charts Don’t Tell the Full Story:
Throughout the housing boom years, many agents got into the habit of canceling a listing so they could immediately re-list the property under a new MLS ID in hopes that the property would get buyer attention as a new listing. The technique wasn’t very effective at getting homes sold, but it didn’t stop agents from giving it a try when they had a property on the market that wasn’t getting showings.
A couple of years ago, the St. Louis MLS board cracked down on agents using this technique and it rarely happens anymore.
How Does This Procedure Change Impact the Charts?
Imagine we have a house that was put on the market and takes 200 days to sell.
Today, that house would have one MLS listing ID which would fall into the SOLD category. But in 2005, that home very likely would have 2 MLS listings (or more). At 100 days, the agent might have canceled the first MLS ID and immediately re-entered it into the system as a new listing. Under this practice, the home would show up as having one FAILED listing and one SOLD listing.
What this means is that the number of FAILED listings in the years before 2007 were inflated making the actual increase in failed listings more dramatic than the charts demonstrate.
Part 3 – 2010 Home Sales by Price Range
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Possibly Related Posts:
- What is the Appreciation Rate of St. Louis Homes?
- What is the Appreciation Rate of Lake St. Louis Waterfront Homes?
- Condos are Harder to Sell than Single Family Homes in a Down Market
- How to Make Your Home Be the Next One ‘SOLD’ When Only 22 Sell per Day
