April home sales reveals that the market is holding steady. It is a neutral market. Home prices are increasing at a very modest rate, in accordance with statistical norms. Significant competition is with new homes. Aging communities are facing increasing competition from the new builds/new communities, which are many and coming out of the ground.
However, that does not mean that the resale market is stagnant. Rather, if a home and community have been well maintained, and its decorating and cosmetics kept relatively current, then it should sell within a few percentage points higher than it would have sold for last year.
As is always the case, proper pricing is key. And that is where we are seeing signs of weakness, or more particularly, a misunderstanding on the part of many sellers as to where the market is. Unrealistic expectations have resulted in a widening in the sold to list price percentage ratio and longer selling times. Simply put, a list price higher than what the market will support does not benefit an owner/seller. The perception by some that “ I need room to negotiate” is not supported by the data. The fact is, the internet has made buyers savvy. If listed to high, buyers will not bother with it. The home risks languishing on the market, becoming stale, and generating a lower sold price than would have been obtained had it been priced right at the beginning.
- Homes for Sale. There were 2.1% more homes for sale in April 2017 (621 homes for sale) than April 2016 (608 homes for sale).
- Sold Homes. 1% more homes sold last month (204 closed sales) versus the same time last year (202 closed sales).
- Days on Market. From listing to contract 82 days in April 2017, versus 60 days last year — i.e., it took 37 more days to sell a home this past April from April of last year.
- Sold/List Price Ratio. It is falling, having widened by 2.1%. In April homes went under contract when the sold price was 95% of the list price; whereas, it had been running at a 96% to 97% ratio.