Just wanted to add a comment since I'm being taken to task for what some (who may not read very well) think is a difference in my tone between September 12th and September 28th. I think the
September 28th post says exactly what the
September 12th post said: this is a great time in 2006 to be a buyer, and only a good time to be a seller if you're smart and you know what this market wants, and you can offer it to buyers at a fair price. That's not a change of tone, nor am I recanting anything I said earlier.
The waters are muddied by overpriced listings that were either priced by unrealistic sellers and/or desperate agents. And eventually those houses get pulled from the market or they get reduced and sold, likely right around where they should have been priced in the first place, or sometimes a bit lower.
Which brings me to my next comment: the number of reductions in this market is directly proportionate to the number of greedy sellers and bad agents out there, not because the market is tanking. The number of properties going into contract has been steady all year long, the only thing that has changed is that more folks are deciding to put homes on the market. The average number of properties that have gone 'contingent' is 107 per week (between 96 and 136). The average number of properties that have gone 'pending' has been 147 (between 100 and 188, but usually around 140).
NOTE: not all properties go first to 'contingent', then to 'pending', then to 'sold... Despite what some who don't practice real estate would have you believe. It's true that many properties do follow that path, but if I get two or more offers, put one into first position, and have a backup offer, there's little chance of the deal falling apart at that point, and I will go from 'active' directly to 'pending'. Same goes for an all-cash sale (of which there are still MANY, believe it or not). But there's no way to track this directly from the MLS, so I just have to remind everyone that just because there were 108 'contingent' properties last week, and 158 'pending' properties, some of those 'pending' properties likely went directly from 'active' to 'pending', which changes how others are reporting the ratio of new listings to sales (properties put into contract).
So, if you look at all this as a function (and I know how much you guys love this one) of supply and demand, we have relatively consistent demand and increased supply. Some sellers are going to lose out because of that. And given that there has always been higher demand, this just makes for a better, balanced market.
And it's good to see some sellers getting what they deserve (the smart ones) on the positive side, and other sellers getting what they deserve (the not-so-smart ones) on the negative side.
It's also interesting how nobody remembers that we had price reductions last year, too. Just as we have unrealistic sellers and desperate agents this year, we had them last year, too. The difference is, for whatever reason, that more folks have decided to put their homes on the market in 2006. I'm guessing that people are trying to 'time' the market and get out while they think the market is peaking. Well, that was last August in many people's minds. But in my opinion that was just a peak of demand versus inventory. There was little inventory and tons of demand, so we had lots of multiple offer scenarios (I got 27 offers on one property last August), which pushed prices up a bit higher than they might have gone otherwise.
But on the flip side, many prices are up over last year. Even for places where the price was reduced prior to the property selling.
If you look at the image to the left (click
here for the full-page PDF), you'll see that our inventory trend actually kicked up in early 2005, but that pending sales have remained fairly constant for TWO YEARS. So where's the market crash here? We just have a bit more inventory right now. That's all. It does affect the market, but for most it's a positive change.
So I'm sure if you have lots of free time and you want to dissect the less-than-complete information that is available to non-agents, and include (legitimately) the unlisted inventory of high rise condos, you can make this market look as bleak as you'd like it to.
Or you can quit wasting your time trying to 'time' the market and you can take advantage of a great fall market for buyers.
Unless you want that 'perfect' house with all the bells and whistles, in which case you'll probably be paying over-asking in competition with other buyers.
So you can have a lot in this market, but you can't, unfortunately, have it all.
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