Most of the national and local news reports looking at how the housing market is doing monitors changes in average sale price.
While it is a useful metric to gauge the strength of the housing market, there is a major problem with using just this single statistic.
An increase in average or median sale price for an area does NOT mean that your home increased in value. It might mean homes are appreciating. But it also could mean that buyers are feeling more comfortable spending more, and they are opting to buy more expensive homes. In addition, if there is a new construction project in the area, the median sale price is likely to increase since new homes almost always cost more than older homes of similar size which are nearby.
So, while increasing sale prices does indicate that positive things are happening in the market, it might not mean your home value is increasing.
So how do you know how the market is doing?
You need to look at a number of factors.
One of them is evaluating how many homes that are put on the market actually sell vs the ones that are pulled off the market without selling.
This data isn’t as easy to obtain as average sale prices, but I’ve taken the time to gather the information and put it into easy to ready charts for you.
I’ll be the first to agree that this isn’t the only factor affecting the housing market. Over the next few days and weeks I will be posting more information about the health of the St. Louis region housing market.
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How Many Homes are Selling…and How Many are Failing to Sell?
Take a look at the charts below to see the impact that the depressed housing market has had on the number of homes that have sold each year since 1999.
The good news is that St. Louis City, St Louis County and St. Charles County all have seen an increase in single family home sales in the last year. While the numbers aren’t back to pre-recession sale levels, they are going in the right direction.
Even more dramatic…the number of owners who failed to sell is headed in the right direction. With almost half of the homes listed failing to sell in our major 3 counties, there is still a long way to go before we have a healthy real estate market in St. Louis. Still, as sellers price their homes realistically and buyers feel more comfortable making offers, this number should continue to drop.
The data represents residential for sale home listings through the St. Louis area MLS (MARIS). Failed listings included expired, withdrawn and canceled listings.
More Condos Failed to Sell Compared to 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.
Just a couple of years ago, more condos were failing to sell than were successfully selling. Depending on where you live, only 3-4 of every 10 condo listings were selling. Take a guess on how that impacts pricing.
Similar to the single family home market, condo sales are moving in the right direction. More condos are selling and fewer failing to sell.
The housing market still isn’t a strong market. Prices aren’t yet climbing. However, if the trends from the last few years continue, we should see a stronger 2013 housing market than we’ve seen in years.