Thursday, March 12, 2009

Are less people selling or are homes on the market longer, or combination?

another good question that I thought I would share the answer with you

Hi Mark,

I have a question. The 50% drop in sales from last year means;1 ) less people are selling(i.e they are holding on to their homes)
2) homes longer on the market( i.e homes are being listed just as much as last year but there is less interest to buy 3) combination of the two.

Thanks,
S.
Hello S.,
Good questions.
  1. There are actually more homes on the market. 50% drop is the actual number of sales year over year.
  2. Days on market is longer, meaning it's taking on average, about 2 weeks longer to sell a home. Behind this, what they don't tell you, is that sellers are on the market for 2 to 4 weeks, don't sell, reduce price by 5 to 10% and sell, house takes 5 to 7 weeks to sell rather than 2-3 weeks.
  3. The two situations above are an indicator of a slowing/slow marketplace. Not sure which one came first.
There are less people buying, especially first time buyers, so this is the end result of a cautious buyer.
I hope this helps.
Please let me know if you have any other questions or if there is anything else I can help you with.

Thank you,

Mark



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