Longer Days on Market Does Not Mean It’s OK to Lowball
The days on market are getting longer in Sacramento and, in particular, where I sell a lot of homes in Elk Grove. I would not go so far as to say that my real estate activity in Sacramento is 100% indicative of what’s going on across the board, but there certainly are parallels due to the vast territory I cover as a Sacramento real estate agent. Lots of agents work in only one neighborhood but I cover four counties and, as I have promoted the crap out of, I am the # 1 Sacramento agent at Lyon*, so I see a lot of listing activity up close and personal.
In fact, I wrote a newsletter for homebuying subscribers at About.com about the longer days on market last week and no sooner did I send it out last night than I received an almost duplicate piece from some other company. Coincidinky? Perhaps.
The reason I started to look at the days on market is because homes had been selling so quickly last spring, but once we got past mid-summer, the days on market began to grow. When days on market get longer, it seems that some buyers expect to lowball. I don’t know if they do this on the advice of their agent or if they saw it on TV show somewhere but the strategy for days on market can change depending on market swings. Our real estate market in Sacramento has swung. We’re pretty much back to normal and nobody knows how to handle it, it seems.
When I asked an agent to explain why her buyers wrote an offer at 85% of market value, her retort was the days on market were almost 30 so that meant the home was overpriced. What is this? Laurel and Hardy? Where did she get that idea? I’m not sure if it’s clueless agents or ignorant buyers or a combination of both or maybe something else that’s in the water, but 30 days on market is pretty darn normal. In fact, many homes are taking 45 to 60 days to sell in this market.
And they are selling at market value, which in most cases is list price. I see this is my own inventory of homes for sale. But just to show independent third-party statistics, I pulled a chart from Trendgraphix, which also illustrates this point and attached it to this blog. You don’t have to take my word for it. Take Rod Stewart’s: Every picture tells a story, don’t it?
Image: Trendgraphix, Day on Market and % of Sales Price to List Price, February 2014.
*per Trendgraphix stats for units sold, Sacramento County