Over the last few days I’ve reported on the St. Louis housing market statistics for 2008.
In order to understand how the housing market is doing, two additional factors need to be examined in addition to the number of homes and condos selling per price range.
How Long Does it Take to Sell:
One of the assumptions in a depressed housing market is that it takes a long time to sell every property. The numbers simply don’t support this assumption.
In 2008, 48.1% of the single family homes sold in St. Louis City, St. Louis County and St. Charles County got an accepted contract in 60 days or less. Though the condo market is much more depressed with only 1 in 10 buyers choosing a condo over a single family home, 37.4% of the successful sales still sold in 60 days or less.
***DOM (Days on market) is the number of days from when a property is listed until it has a pending contract that ultimately closes.
How Much Do Sellers Come Down from their List Price:
While I was pulling the data, I decided to also check and see what percentage sellers received from their list price. Realtors are continually telling their clients that a seller that prices their home correctly at the start will sell faster and for more money. Since I’m not a believer in just trusting what you hear, I decided to check for myself.
The St. Louis MLS (MARIS) recently changed the way they calculate % sale price to list price. In the past, percentage sold price/list price was calculated using the final listing price, meaning the price the property was listed for when it got a contract. However, on January 1 they changed the formula to compare the final selling price to the original listing price instead of the final listing price. As a result, first impressions incorrectly make it seem that sellers are coming down now more than they were in the past.
The old formula consistently showed that sellers on average came down between 3-5% off of their current list price regardless of the price range or area.
The new formula results (see above charts) show unrealistic sellers that overprice their homes stay on the market a long time and eventually make dramatic price reductions (or they simply don’t sell).
Honestly, I think both formulas added a valuable piece of information. I wish they hadn’t dropped the old formula, but had instead added a new way of looking at market trends. If only I made the rules.
NOTE: The data above included residential and condo properties in the MLS (MARIS) in St. Louis City, St. Louis County and St. Charles County. The data is deemed reliable but not guaranteed.
Conclusions:
Even though we are in a slow housing market, 27% of homes and 20% of condos are still sold in 30 days or less. Almost 1/2 of homes and a little over 1/3 of condos sold in 60 days or less.
If you are looking for a reason to price a property based on the current market rather than trying for a higher price for a little while, just take a look at how the sale prices goes down the longer a property is on the market. Unrealistic sellers that are willing to wait for the right buyer usually end up making less in the end.
The difference between how much sellers came down on homes vs condos has a lot to do with the % of properties that were resale vs new construction or condo conversions. While 95% of the homes sold were resale properties, only 77% of condos were resale. Clearly, builders and developers are holding more firmly to their prices than the average property owner.
What About my Closed Sales in 2008:
I pride myself on working hard to thoroughly analyze the data before recommending a listing price to my clients. As a result, my 2008 clients did much better than the average St. Louis seller.
If you are thinking of selling this year, I would welcome the chance to talk with you about how I get homes sold quickly while still going after the highest reasonable price.
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