I met a couple this evening contemplating a move to the Bay Area. They have a 1450+ sq ft home in the New Northwest, nearly new, backing to open space, very clean, great privacy, good condition, no real issues whatsoever. Should they list their home for sale now?
We discussed the market, sans sugar-coating. It is what it is.
There are 201 other homes for sale in their area. Only 30 are currently pending. Only 36 a month have sold in the past three months. The absorbtion rate for this neighborhood is a paltry 18%, which means they have a roughly 1 in 5 chance of selling their home if they list today. The average time on the market for these homes is 70 days. We have a 6.7 month supply of them in this neighborhood alone. Which means, if this couple is serious about selling quickly, they need to price their home competitively, meaning slightly below the competition.
The challenge? They bought recently, don’t have a lot of equity and need to maximize their sale price. Especially given that they’ll be moving to a much, much pricier area. What to do…
We decided to wait a month to see what happens in January, a pivotal month. If the weather is bad, showings will be down, and non-serious sellers will give up and either withdraw or let their listing contracts expire. This will take even more inventory off the market, giving my sellers a less competitive landscape.
Meanwhile, investor confidence has recently gone up. And my buyer calls are up. I have people looking for February-March move-ins. I personally believe activity will improve in the near future. Rather than listing now, risking inactivity and the stigma of a stale offering, I recommend waiting it out a bit to see who drops out of the game. The market is still shifting. Fortunately, my sellers timing is flexible, providing critical leverage.
