Market Conditions

Over the last few weeks, I’ve been posting information to show you how the St. Louis housing market has been doing in the last few years.

Earlier this month I published reports showing that the vast majority of homes and condos which sold in 2009 were priced below $200,000. Owners with higher priced homes have had an uphill battle trying to sell.

Then in the last couple of days,  I showed you the appreciation rate of homes and condos.

St. Louis region homeowners who have owned their homes since 1999 have seen appreciation rates that are not far off from the historical appreciation rate of 4% per year. However, both homes and condos have been depreciating in the last several years.

Homeowners who purchased at the peak of the market in 2005-2006 and need to sell are finding themselves in the difficult position of owning a home that is worth less today than it was when they bought it.

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.

Even more dramatic is the number of owners who failed to sell.

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 Failed listings included expired, withdrawn and canceled listings.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.

Every agent I have talked with in the last year about the housing market agrees that condos have been harder to sell compared to single family homes.

The data backs up the impressions that I’ve had for a few years. Today, more condos are failing to sell than are successfully selling. Depending on where you live, only 3-4 of every 10 condo listings will sell. Take a guess on how that impacts pricing.

In addition, 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# in hopes that the property would get new attention as a new listing. The technique wasn’t very effective at getting homes sold, but many agents thought that it was worth a try if they had a property on the market that wasn’t getting showings.

The result is that many of the “failed” listings between 2002-2006 really did sell through a subsequent MLS#, and the failed listing number is likely inflated. A couple of years ago, the MLS board cracked down on agents using this technique and it rarely happens anymore.

Plus, the number of  “sold” listings in the last few years is also inflated since many homes listed for sale have been getting rented instead of sold. Rather than canceling the listing, most agents simply enter the monthly rental rate as the ’sold’ price.

When you factor in the impact of canceling & re-posting listings along with homes that didn’t really sell but were actually rented, the true increase in failed listings is probably more dramatic than the charts demonstrate.

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