Sales in January were off 44% from the year prior as inventory increased after the holidays. Meanwhile, the median sales price increased slightly to $269,000. Months supply of inventory increased in every price category except in the over $2 million range. Overall we have a nearly 20-month supply of homes… even more of a buyer’s market than in months past. Pendings are up 18%. Full report.
Note: My numbers differ slightly from Guy’s as I include manufactured homes that qualify as real property.
Diane CohnA creative strategist, Diane uses every angle she can to get the best deal possible for her clients. “I know the market. Trends, numbers, what’s happening on the street. I use it all to my client’s advantage,” she says. Diane earned her BA from the University of California and is an accredited ABR, SRES.
Guy JohnsonA successful prior business owner, Guy brings to the table twenty-plus years of exceeding client expectations. “Listening closely to my clients is the most important step to meeting their needs,” he says. A former Chicagoan, Guy earned his MBA from the University of Illinois.
JoAnn CorrieraJoAnn Corriera is one of Reno’s top-producing real estate agents. She credits her take-charge, pioneering spirit and determination to deliver the positive solutions clients are looking for. JoAnn offers the market expertise and marketing skills that generate top results whether clients are buying or selling.
Mike McGonagleAn architect, business owner, and compulsive public records hacker, Mike reads the tea leaves of the local real estate market from a unique perspective. Yet another Chicagoan, Mike earned his MArch from Harvard University.
15 comments
Diane, I realize your numbers differ from Guy’s. But according to your numbers, sales were down 23% in January from December; pretty much in line with what Guy has reported.
However if your pending figures are accurate; and they actually materialize into sales; January may prove to be the low point of the year insofar as monthly sales are concerned; and, I would expect the median sales price to drop.
BTW, I have a question for you Diane. When you report that on average sales for the month closed at 95% of asking price, what exactly is the asking price? In other words, does it represent the price when the listing first came on the market 171 days ago? Or does it represent the price after a series of price reductions, the last of which was 2 weeks ago? Thanks in advance.
Good question, Smarten. If I may chime in, the “sales-to-list” price ratio is determined using the “original” asking price; as in the price of the property when it was first listed under that particular MLS number. …not the price after a series of reductions.
At least, that’s how our MLS software (Paragon) calculates the ratio. [Diane, please correct me if you calculate it differently.]
Smarten, another thing to keep in mind is that the Paragon system calculates the ratio using data only under the most recent listing number. Therefore, if the property was previously listed under a different MLS # (i.e. different broker/agent), then that previous asking price would not be used for the calculation.
Hope this is clear.
It is the price that was the asking price at the time the offer was made. So for the house that comes on the market at $600,000, then drops to $575,000, then drops to $540,000, then drops to $510,000, then drops to $485,000, and then sells at $460,000, the house actually sells for 75% of the original asking price.
But the realtorindustry likes to call it 95% because it sounds a lot better.
If I recall, about a year ago, Guy posted that under $300K, houses sold for 95% of asking, between $300K and $500K, it was down to 88% of asking, and above $500K, it was 93% of asking. I am a bit skeptical about that 95% figure. I know many realtors, and they all tell me that 90% offers, and lower, are common now. And they tell me that sellers accepting 91-92% is not uncommon. 95% of asking is typical in a normal market, not in one where, as Diane says, if you are a seller, you have a 95% chance of not selling your house.
But at least the DOM numbers appear to be a lot more honest now. No more nonsense about houses selling in an average of 35 days like we used to be told.
R.I., looks like you and I are contradicting one another. I’ll leave it up to Diane to let us know how she calculates the ratio.
Guy, are you saying that if a house initially lists for $600,000, goes through a series of price reductions and has been reduced to $480,000 when an offer is finally received, and sells for $460,000, that it is reported by the MLS as selling for 75% of listing?
Are you saying that we should understand Diane’s report to mean that all the houses that sold in January sold, on average, for 95% of the ORIGINAL asking price?
Really? Remember the house on Russell Pointe Cr. in Somersett that was the subject of some conversation here a couple months ago? That house originally listed at $1,300,000. It went through a series of price reductions down to $799,900, and finally sold at $775,000.
Are you saying that house was reported as selling for 59% of asking by the MLS?
I anxiously await your answer because I have in my possession a realtorindustry publication that specifically refers to that house as selling for 96% of asking.
Guy,
Here’s a house Iv’e been watching. MLS # 70021873. 1 Newlands Cr. in the Old SW. Originally listed for $799,900. Now down to $724,900.
Let’s say somebody comes along and offers $688,750, and that offer is accepted.
Are you saying that the sale would be reported as 86% of asking? In other words, this sale would be 9% below the average sale in terms of the asking price:selling price ratio?
I will bet you lunch that the sale gets reported as 95% of asking. At least by the selling agents in their next mailer.
Interesting. We previously learned DOMs, as reported on the MLS, are skewed. Now RI is suggesting sales prices as a percentage of their listing prices are skewed [Guy also makes this suggestion through circumvention where a property is re-listed with a new MLS #]. We know DOMs and median prices are further skewed because they DON’T apply to the 96% of listings that simply don’t sell.
So really, what data we as the public are fed isn’t skewed [and thus the real data we should concentrate on]? I submit it’s the number of properties for sale [whether or not listed on the MLS], and the number that actually sell.
If this is true, why do we continue to rely upon garbage data as barometers of the market like DOMs, median prices, sales prices as percentages of listing prices, etc?
“…why do we continue to rely on garbage data as barometers of the market…”
Smarten you sound like Lindie tonight. (By the way, where is Lindie?) She always pointed out the “spinjive”.
The reality is that the real estate industry needs to maintain an Illusion. The Illusion that things are good, or if in a market like this one, that things are not all THAT bad. Nobody wants to buy a pig, so the industry puts a lot of makeup on the pig. The hope is that peopole won’t realize it’s a pig.
What sounds better……that the Somersett house sold for 97% of asking, or that it sold for 59% of asking?
This is just being realized? Wow! I would of figured everyone knew this by now.. I guess not.. the 1st I have heard of this on the blog.
btw well said skrapguy.. Image means everything! especially to under-educated folks.
R.I., I believe the disconnect we’re having is that the “original price” gets reset each time the property is re-listed under a new MLS #. Using the Russell Pointe Ct house above as an example, that property was listed under seven different MLS numbers before it finally sold. The last MLS entry (MLS #70013772) was listed at $819,900. The price was reduced to $799,000, and it sold for $775,000. The MLS will report a 95% sale-to-list ratio [$775,000 / $819,900]
You are correct that the property was first listed at $1.299M, but this was under MLS #60009566. It didn’t sell, and was subsequently re-listed under MLS #60016071 for $1.199M. At that point $1.199M became the new “original price”.
Then $1.099M (MLS #60019631) became the new “original price”.
Then $869,900 (MLS #60023213) became the new “original price”.
And finally $819,900 (MLS #70013772) became the new “original price”.
Well Guy, that’s my point. It is these kinds of realtor games that I am talking about. SEVEN different listings for Russell Pointe Cr. before it finally sold??
And for what purpose? For no other purpose than to create the misleading impression that 1) the property was not languishing on the market (which it was) by phonying up the DOM number, and 2)the property sold for very near the asking price.
So the NNMLS reports the property sold for 95% of asking after a relatively brief time on the market when the truth is that the house sold for 59% of the original asking price after hundreds of days on the market.
“Garbage data” indeed, Smarten.
Lipstick on the pig indeed, Skrap.
I was watching one of those real estate TV shows over the weekend, and one of the realtors was saying “well you know the market really is showing signs of life. Buyer activity (that must be the realtor buzzword of the month) is up and sellers are getting most of their asking price and houses are selling more quickly now.”
Yea, right.
Anybody who thinks the “made for public consumption” propaganda that comes out of the MLS is the straight story is a Fool.
This Somersett house is the perfect example of why the NAR fights with millions of dollars to keep the MLS closed. Can you imagine what would happen to the credibility, or what’s left of it, of the real estate industry if the manipulations and deceptions that go on inside the MLS became common understanding?
At least Guy has the integrity to speak the truth. We probably won’t be seeing Guy as a director of the NNMLS anytime soon.
In this market, a couple of pieces of information are essential:
1. What is the first listing date of the house?
2. What was the first asking price?
3. What was the seller’s original purchase price?
4. How much do they owe?
As for the “made for public consumption” propaganda and putting
lipstick on the pig-I think of it more as taking the pig down to Mexico for a cheap facelift and thinking no one will notice.
A good idea is to always ask your Realtor to run a property history on any home you’re seriously considering… this will turn up all the MLS listings ever associated with the property. And as NAS points out, ask for the tax record as well, to find out what they owe. Good stuff to know before making an offer.
I thought all the cheap face lifts were done in Brazil. Dang, I’ve been sending my pigs to the wrong place!
What a great con game the realtors have going. First they set up an MLS that is full of deceptions and outright lies. ( “look here…. houses in Reno are selling for 95% of the asking price….”) Then they close the game to all but the dues paying members. Then they say if you want to get through the lies and deceptions, you have to hire one of us to tell you the truth.
It is quite easy to understand why the NAR spends millions to keep the game rigged. Is it nice to know your dues are hard at work?
If a registered securities dealer engaged in the behavior typical of the real estate industry, he would be behind bars.