Prompted by a recent question from one of the readers, I decided to take a closer look at the make-up of the current listings on our MLS, and then compare them to the make up of September sales. What I found may (or may not) surprise you.
Whereas September sales were essentially distributed evenly among bank-owned properties, short sales, and equity sales, the make up of the current listings is quite different.
| sales type | September sales | current listings |
| bank-owned | 33.9% | 13.7% |
| short sale | 32.3% | 38.4% |
| equity (non-distressed) | 32.7% | 47.9% |
As can be seen in the table above, though bank-owned properties make up a third of monthly sales, they account for only 14 percent of the listings.
The difference in the median sold vs list price also showed huge differences depending on type of sale.
| sales type | September median sold price | median list price |
| bank-owned | $145,000 | $164,200 |
| short sale | $168,000 | $159,950 |
| equity (non-distressed) | $226,575 | $379,000 |
Not surprisingly, those sold vs list price differentials equate to relatively greater days on market (DOM).
| sales type | September sales DOM | current listings DOM |
| bank-owned | 90 days | 65 days |
| short sale | 191 days | 129 days |
| equity (non-distressed) | 121 days | 137 days |
Calculating months supply of inventory by sales type, we again observe marked differences by sales type.
| sales type | months supply of inventory |
| bank-owned | 1.9 months |
| short sale | 5.8 months |
| equity (non-distressed) | 7.1 months |
Most of these results will not surprise regular readers of the blog, however I was not expecting such a wild discrepancy between the median list price and median sold price for equity sales. As the numbers above show, regarding non-distressed houses, the median sales price is 40 percent below the median list price.
bob_c
there arent move up buyers, because almost a decade of reno residents
didn’t make a profit on their homes to be able to move up
the entire dynamic of real estate has changed—the sell and buy a more expensive
home is gone
cut your price to the bone higher end equity sellers or it won’t move
MikeZ
Guy, may I suggest that you recalculate the medians for both listing and sales (in all categories) but only include the houses that sold or went under contract in the data?
As presented, the listing and sale medians are for two different sets of data: sales median is for all sales, listing median is for all listings. Having two very different sets of data hampers comparsion.
billddrummer
To Guy,
Thanks for the breakout. This confirms something I’ve suspected for some time: Equity sellers are still drinking the Kool-Aid.
(I mistakenly typed Kook-Aid before I proofread this.)
John Newell
@billddrummer,
I like “Kook-aid” better.
@MikeZ,
For the most part, I have agreed with your past comments regarding the problem of conflating selling prices with listing prices, but I cannot agree with you here. The very purpose of the comparison above is to try to gauge the gap between what sellers are asking and what buyers are paying. Limiting the comparison to the asking prices v. the selling prices for just those properties sold or under contract, while an interesting analysis in and of itself, would not gauge the gap in the market as a whole.
@Guy,
Do you have any way of tracking how many of the equity sales were listings that underwent one or more reductions in asking price before the property sold? Such data might reveal how far initial asking prices are from sales prices with regard to equity sales. In the same vein, is there any way of determining how many short sales were first listed with an asking price greater than the amount owed before asking price reductions led to a short sale condition? A couple of years ago I saw many such listings, but lately it seems most short sales go on the market as short sales.
Raymond
You point is excellent John Newell. Most houses sell for something pretty close to the MOST RECENT asking price. In fact, realtors love to say that houses, in general, sell for 95% (or whatever) of asking. They never say that the asking price had to be reduced 4 times and by 35% before it got the offer. The most valuable information would be to compare actual sales prices to INITIAL asking prices, and I suspect that information would be far too time consuming for Guy to collect.
A comparison of median selling prices to the median MOST RECENT asking prices will reveal that the buy price is pretty close to the ask price. Diane in her monthly recaps used to provide that info and it was always around 95% or so. Not really news.
Catherine
I am surprised to see bank owned sales price lowest. Some banks are wanting to list their properties to compete with non-distressed properties.
MikeZ
For the most part, I have agreed with your past comments regarding the problem of conflating selling prices with listing prices, but I cannot agree with you here. The very purpose of the comparison above is to try to gauge the gap between what sellers are asking and what buyers are paying.
That may be your purpose; I want to know the current discount from listing price.
MikeZ
The most valuable information would be to compare actual sales prices to INITIAL asking prices, and I suspect that information would be far too time consuming for Guy to collect.
Yes, that’s another useful metric. That comparison also requires that you limit the data set for both initial listing and sales prices to closed/under-contract only.
There’s no meaningful way to compare median sale price to median list price, as presented. Either may be higher, or lower (shorts have a higher median sale price!), as you can see from the 3 sales types.
Guy Johnson
Yes, these metrics might be tedious and time-consuming to compile. But, I agree, would be interesting.
Guy Johnson
…actually, calculating that metric was not as tedious as I thought it would be. I dumped September sales into a spreadsheet and calculated the medians by sales type. Here is what I found:
Sales type / median sold $ / median list $ / discount %
bank-owned / $145,000 / $154,900 / 6.4%
short sale / $167,750 / $176,500 / 5.0%
equity (non-distressed) / $225,000 / $249,900 / 10.0%