This is me in the Arizona Republic (permanent link):
A buyer’s market? You bet, but even more than that, it’s a listing agent’s market
As I write this, there are 55,706 homes listed for sale in the Arizona Regional Multiple Listings Service. Some are anomalous listings, but those would account for far fewer than one percent of the total. Allowing for every possible quibble, there are a lot of homes for sale — double what there should be.
In July, 4,730 ARMLS-listed homes were sold. Funds changed hands, escrow closed, sellers moved out, buyers moved in — sold.
That’s not a very healthy number of buyers. Five years ago, in July of 2002, 6,113 homes were sold. This is before the market went crazy, so it’s a reasonable number for comparison.
So we have about 75% as many buyers as we should have pursuing 200% of the normal quantity of inventory. That’s an 11.78 month supply of homes. Another way of saying the same thing: Every buyer in the market right now could have twelve or more candidate homes to choose from.
Not all locations are the same. Some buyers might have two or fewer homes to work with. For example, historic or architect-built homes are always in short supply. If you want to live in a high-demand area, you may have no homes to choose from. On the other hand, in very low-demand subdivisions, buyers may have 30 or more appropriate houses available to them.
Is this a buyer’s market? Oh, you bet! But even more than that, I see it as a listing agent’s market.
Why? Because for every home listed in the next 30 days, only a very few are going to sell within 30 days of being listed. For every home that comes off the market, at least one will replace it in the MLS. The ones that don’t sell immediately could be out there for a long while.
Which homes will sell? Those that are perfectly marketed in every possible respect: Priced right, prepared right, presented right. During the boom, anyone could sell a house. Now — and for the foreseeable future — only the very best listing agents are getting the job done.
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Toby & Sadie says:
Greg,
You have an amazing way of bringing the important thing out in your writing.
We talk about “months” of inventory, but does that really matter anymore? It isn’t like once you’re on the market for “x” months, the home will magically become more desirable and sell.
We need to get our listers to think about it as a numbers game … “If I want to sell my house in Home Town, I have to beat 11 other houses to get the offer.”
Wow. Doesn’t that kick up the competitive juices of anybody and make the entire listing team (and yes that INCLUDES the sellers) into high gear.
August 24, 2007 — 9:32 am
Eric says:
I think it all hinges on your definition of a “listing agent” 🙂
“I enter home data I got from my last presentation” vs “I actually market and sell homes”.
This should flesh out those projected NAR numbers.
It’s a bad time for real estate, but a great time for agency. We saw the same with the tech boom. The skilled and willing stayed and worked and evolved. Those just in it for an easy buck, went onto the next future big deal..
August 24, 2007 — 12:11 pm
Greg Swann says:
> “If I want to sell my house in Home Town, I have to beat 11 other houses to get the offer.”
We do it that way. We comp from the appropriate inventory, but we work with a much shorter list of homes we are actually worried about. We can pick out the ones that offer significant value — either in price, amenities or more ephemeral considerations — so we concentrate on beating those particular houses. Sometimes we know that a particular house will have to sell before ours can pull ahead of the pack. We also watch for yard sales, dumpsters, painters — tell-tales of houses that might be coming to clobber us. If we get absolutely everything right and the house still doesn’t sell, then we can blame “the market.” My inclination is to suspect that one or more of our premises is wrong. One of our goals for this year is to get better at reactive strategy — what to do when the initial assault fails. I don’t think there is any limit to how much better listers can get.
August 24, 2007 — 1:43 pm
Jim Gatos says:
Gregg,
The only time I think a listing agent is successful is when I see the agent have an inventory that is moving and selling with a market time of 100 days or under.
When I see agents with market times that go higher than 180 days, either they have weak listing skills, don’t have the guts to dump bad listings, or cannot keep the sellers inline with the market.
Whatever the reason, that’s why you have the “bloat” in the market. That’s why buyers get overwehelmed; they ha ve to “sift” through so much crap to find a sensible buy…
That’s another reason why sometimes real estate agents get a bad rap…
August 25, 2007 — 7:53 am