This post is for one of our regular readers. Most of us believe that there are people here in St. Paul who would like to sell their homes but have not been able to, or have given up, or have decided not to even try. We don't have any numbers on how many people would like to sell but do not have their home on the market.
I did a little research by looking at the data for St. Paul in the regional MLS and found that in the city of St. Paul there are currently 2040 single family homes on the market. Since the beginning of the year 6206 homes have been listed on the MLS, and 2501 of them have sold this year. 3333 of the homes that were listed on the MLS have been cancelled or the listing contracts have expired. Some of the expired and cancelled listings are back on the market and some have been sold.
Listing can expire and be cancelled multiple times and still be re-listed or sold. Each time a listing is cancelled or it expires and is re-listed it shows up as a new listing, and becomes part of the 6206.
It is safe to say that this year more than half of all of the homes listed in our MLS were cancelled or expired at least once.
Of the 6206 homes that have been listed this year, after subtracting the 2501 that have sold and the 2040 that are currently on the market there are 1665 homes that we can't account for and have been taken off the market, at least for now.
Here are the numbers again:
St. Paul homes listed on the MLS in 2008 = 6206
St. Paul homes currently listed = 2040
St. Paul homes that sold in 2008 = 2501
St. Paul homes that were listed in the MLS in 2008 but this listing was cancelled or it expired = 3333
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The sad thing is a lot of sellers can be helped with short sales. I don’t know why some sellers don’t at least even try. Some agents don’t like them and won’t even offer them as an option to their clients. That’s wrong.
Start with 6206 and subtract 2501 houses sold.
This means that 3705 listings did not sell.
Like you said, subtract the current inventory, 2040.
Now we have 1665 unaccounted for listings.
What we don’t know is how many were re-listed.
If we assume 1/2 of the current inventory (1020) has been re-listed, that means that 645 listings were pulled off the market.
As a percentage of current inventory, it is about 1/3.
As a percentage of sold inventory, it is about 1/4.
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What I think may be enlightening would be to look at year-over-year inventory levels on a per-month basis to determine how much of a decline in listings has occurred. This may help get an idea of the homeowner who did not even bother to list their house.
A big y-o-y decline in listings would be indicative of this trend.
Everyone assumes that declining suppply will automatically equate to higher prices. It will not, for now.
The reason is that buyers are looking in a forward direction to tougher economic times, where many sellers are still stuck in 2005. This disconnect between expectations was/is the reason behind the slower sales pace.
For now, expect actual prices at closing to be driven more by affordability and consumer sentiment than supply.
Access to credit is also a big factor.
In other words, supply may be contracting, but it is likely that demand is contracting faster.
PB I am not sure it is safe to assume that 3705 listings did not sell, listings maybe but not the same house. They go on and off the market and may have been counted as listings multiple times and counted as cancelled or expired multiple times. For instance I listed a townhouse that another agent had that had expired. I think the 1665 means something. Last year was a banner year for putting homes on the market so I can tell you without even looking that fewer were listed this year. I also think there were more sales this year then last year. I’ll get some hard numbers and publish them soon.
I did not say that 3705 houses didn’t sell, I said that 3705 listings did not produce a sale.
Again,
6206 total *listings* less 2501 actual sales, leaves 3705 *listings* that did not produce a sale.
Subtract current *listings* (2040) and we have 1665 listings that are not accounted for.
If, as you said, approximately half of the current inventory is on its second listing (1020), then the number of houses pulled of the market would be 645.
It was that last number, 645, that is my approximation for towel-throwers.
It is kind of funny the perceptions the public has. On one hand I had to spend an extended period of time with a now home seller, explaining and proving that his home has not been appreciating over the past 18 months, and is not currently appreciating. On the flip side of that, I got comment on one of my blog posts yesterday stating “selling a home in Morristown New Jersey is like trying to sell ice to Eskimos” I don’t know this person or his experence, as of November, 1 2008 we had sold 154 homes in Morristown, as compaired to the same date in 2007 at 143. Sure seems like homes are selling to me.
The MLS in Central Oregon has made the list and relist game a little different we now have days on market and cumulative days on market – so unless a seller is off the market for 90 days or more they do have have a fresh start on the market -
IMO, every listing that comes off the market IN ANY MANNER is a step closer toward a balance in supply and demand. That’s a good thing.
In my market (Northwest Michigan/Traverse City area) we’ve seen the number of listings taken YTD through 11/1/08 fall by 22.9%. That’s a step in the right direction.
I know that there were many of my Twin City residents and clients that are traditional sellers who took their homes off the market realizing that they were not going to get what they wanted since they were competing with so many foreclosures and short sales. They didn’t HAVE to move. Traditional sellers are frustrated when having to have their homes compared to the significantly low, “fire sale” pricing of short sales and foreclosed homes. In my experience, there are many who have decided to wait a year or two in their current home to see if conditions improve.
True Teri would just be nice to have a feel for how many traditional sellers there are. Will they flood the market with homes again in the spring? I guess that is what I would like to know and if they do will there be enough buyers to absorb them? I have two sellers that took their homes off and want them relisted in spring
A listing that comes off the market may help things a little NOW, but unless the owners decide to wait several years, that pulled listing is pent-up supply.
With regard to “fire-sale” prices, it’s only a fire-sale price if it precipitates a very quick sale. Anything approaching a normal market time is not fire sale priced, it is market priced.
It is going to take a while for everyone to realize that the current prices are NOT anomalies, the 2005 pricing was the unreasonable anomaly.
They only SEEM like fire sale pricing in comparison to mid-2000s pricing, which was completely disconnected from SUSTAINABLE economic fundamentals.
With the winter months starting to settle in, have you seen a significant drop off in the amount of new listings hitting your local market? Perhaps the 1,665 number of withdrawn listings is a function of cyclical trends, in addition to a “bad market”?