market time

“How long will this house be on the market?” – many buyers

The short, honest, answer to that question is, “I don’t know.” No one likes to hear that- but it’s the truth. At any given time someone can be interested in any house on the market and it could sell tomorrow. As a stat-driven-REALTOR I think numbers can lead you on the right path to educated choices. They will never guarantee anything, of course, but they will give you an inkling as to how long something should take. Take this chart of Will and Grundy County properties to close in the last three months (9.28.14 to 12.28.14); 2558 bits of data (closed sales of any type $20,000 or higher) comparing listing market time to percentage of  original list price sold for. I’m on record as preaching that houses generally sell for 94-96% of last list price. I think this shows that I’m not wring.

How do I use this fancy chart to tell me what I asked, smart guy?

Well, you DO need the help of a market expert (I’m one, but there are others). If a house you’re selling or one you’re interested in buying is priced correctly (ie: within 4-6% of where the professional tells you it is likely to sell for), you can surmise that it won’t be on the market very long. If your pro thinks that its value is about 80% of where it is listed, it has just a good of a chance at selling in 120 days as it does 30. PLEASE NOTE: This date is for the FINAL list price. So if that house you have your eye on drops its price, it’s odds of selling sooner will very likely increase. Of these 2558 properties, 1864 (72.9%) had NO price drops in its listing time.

Will/ Grundy County closed sales 9.28.14 to 12.28.14, of better than 70% list price to sales price and 365 days or fewer on the market.

Does this help or make it more unclear?

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I’ve been spending a lot of time in Diamond Estates this week. Many homes, damaged in last year’s tornado, are fixed with homeowners back in place- some bigger and better than ever before. Others are works in progress. Because it’s how my brain works, I wanted to put a number on the subdivisions’ recovery- or lack thereof. In the below chart you will see the numbers for a year leading up to the tornado and the year since. I’m pleased to report that while we’re a sale off, the median price is up a percent and the average time it takes to put said houses under contract is down 9 days (or about 31% depending which angle sounds better to you). This shows that these two subdivisions are as strong, or stronger, than previously. I’d expect nothing less from this #CoalerStrong community.

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Like yesterday’s post about single family housing statistics in Will County, today I give you the numbers for Grundy County in August of 2014. Of significance to me is, like in Will County, the reduction of months supply and median market time. This signals an evening out in what has been a buyer’s market for, seemingly, forever. The total true inventory is also down 23%. That is good and bad. It’s generally great for price and demand but it could very well mean that buyers cannot find a house suitable to their needs/desires.

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We’re into September and a few days later than I’d like to usually send these numbers your way, so I apologize. Of significance, in my opinion, is that Will County put better than 21% more houses under contract this August than last. That could be because of the bad winter that slowed the start of 2014′s real estate ‘hot market.’ Further good signs, however, are that in the year leading up to August, we have seen an increase in closed properties of over 7%.

The median market time has fallen by almost two weeks (27.91%) from a year ago and the months of supply is now in the low fives! Will County is a hot market.

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I preach this stuff a lot. Eventually though, everyone will listen. Pricing is important. Here is a chart of the last 12 months of sales in Grundy County (single family) and the relationship between days on the market and percent of original list price obtained.

Notice the obvious downward linear trend!

What happens if we segment that graph in two parts, one sales from 1-90 days on the market and the other from 91+? You’ve long known about my quality listing approach to listing and selling property, the first graph contains all eligible single family houses for that, the next does not.

Of houses sold in 90 or fewer days, 58.99% of them were “Quality Listings” (again, don’t misconstrue that to mean the other houses weren’t quality or that those agents didn’t do a great job. It’s just a metric I use to show which were truly exceptional. The below graph shows that as you go on in days, you get further from 100% of list price but by a ridiculous margin…..

…..however, when looking at sales 91 and more days from the time of listing, you see that amount of original list prices obtained are harder to rely on. This is why I tell my clients, on listing presentations, that I start losing sleep after 90 days.

The data in this post was obtained exclusively from Grundy County, IL. I’d be willing to bet you large sums of money, however, that it works for Will, Cook, LaSalle, Denver, New York, etc.

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Overpriced Homes

by Jim Ludes on February 27, 2014

in General

A house was listed in the past week in my market area that has a lot of agents buzzing. It seems overpriced. VERY overpriced. Like, almost a hundred grand too high- to where I wondered aloud if the listing agent might have just had a typo when putting in the price. That happens on occasion. More likely, the house is just priced higher than it will probably sell for. Long time readers of the blog know I’m a stickler on pricing (remember the Quality Listing post?).  Today I wanted to look at the actual effect of pricing too high for the market. I’ll do this in two ways.

  1. I’ll take a peek at a sample section of closed homes and the sale prices as it relates to closed price and the amount of time it took to sell.
  2. I’ll also look at houses that DIDN’T sell at all and their market times. This may prove to be even more telling though it won’t give us a sales price to compare.

I took closed single family homes to sell in Grundy county in the last 12 months that were $39,000 and above (just to get to a round number; 500). I bracketed the prices in increments from 1-15, 16-30, 31-60, 61-90, 91-120, 121-180, 181-365, 366-730 and 731 plus. As all numbers can, these could probably be skewed to show whatever I wanted. I didn’t look beyond the numbers above because I didn’t care- that’s not the exercise. The idea is to see what happens in the first two weeks, then the next two, then the following month, another month, the next three, 6 months to a year, one year to two and then more than two years to see what effect that has on obtaining the original list price. The entire spreadsheet is available to you here. As you can see, the percent of original list price obtained drops in each cross section until it rises very slightly at the 6-12 month mark.

Bottom line: the longer your house is on the market, the less it generally sells for. You can see the outliers on the chart, and there will always be some. The best negotiating strength you have is when your listing is young. Not coincidentally, that’s often when the demand is highest.

On the cancelled/expired end of things, there were 311 listings that did either of those in the last 12 months. The average market time of those was 308 days and median was 199 days. See that chart here.

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Market Time

January 9, 2014

Often we will see reports on the news in regards to real estate; national numbers, state statistics, etc. How often do these numbers actively represent the subdivision, town/city or even county in which our home is? I try to tell people frequently, “real estate is local.” Sometimes they listen. Other times they do not. Who [...]

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Second Agent Advantage

September 24, 2013

In real estate, we often say it pays to be the 2nd agent through the door. This means, it’s often better to be not the first agent a house is listed with, but the second after the initial listing does not produce a sale. I had sellers of mine inform me that they were going [...]

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Temporarily Off the Market

August 25, 2011

I get inquiries every so often about a property that is listed as temporarily off the market. Often times this is due to an illness, remodeling, vacation or something that will make the house unshowable (or owners unreachable) for a week or two. In general, these properties are off the market for a short time…..or [...]

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Grundy County Market Times

November 2, 2010

Better values always sell faster than lesser values. In a buyer’s market like we’re in, we assume that market times are on the increase. But do homes still sell quickly? Let’s take a look at the the amount of time SOLD houses in Grundy County are taking to become sold. Single family homes sold between [...]

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