As of April 6, 2020, this report shows a strong decline in homes being listed, withdrawn from the market but little effect on the number of closed sales. This is a fact that may be due to the fact that many of the closed sales (Sold properties) in the months of March and early April had been in escrow already. March 20, 2020, was really our “D” day for us in the industry not being able to show properties and from that day forward we can see clearly a pattern of decline. Let’s first look at Earlier numbers from January 20 through February 19, 2020.
The above statistics show a good accelerating market in early January. Many of us felt the push in late December after a late Summer and Fall lull. It seemed buyers began to jump off the fence and homes started selling at a rapid pace again. The red flag at the time was, however, a low sold price to list price. A -2.75% reduction in sold prices. The number of sales in this 30 days period was 299. This is an increase from 264 sold properties in the same period in 2019.
This is always an interesting statistic that we agents use to demonstrate how important it is you get the price right when you first go to market. Days on market cost sellers money and in this case nearly 7% of the sales price. Once you cross the 30 days on the market, your home begins to lose value. Trust us, agents, when we share with you what the best list price is for you home. The old saying “We just know there is a special buyer out there looking for this specific home, willing to pay more than what it’s worth” never… EVER, works!
There are only two reasons a home doesn’t sell. Price and Price! Price can overcome any objection and if priced right homes sell in a timely manner.
During this time period we saw zero (0) homes temporarily taken off market, 27 homes withdrawn and canceled and 11 properties expired. This would be normal.
The nitty-gritty of the market is in the listing detail. Sold statistics give us a real truth about what has happened and listings (New homes that come on the market for sale) during the same period give us a peek into the future. Here in January, we see the average home was listed for $501,637 which is 4.6% more than the average home sold for during the same period. This is what continues to push pricing up. The real data can be found in the “Other ” category. We can see 225 homes listed in this time period sold, 72 of the homes are pending and 76 are still active. So what are the others?
You have to dig into the raw data of which I have no graph for so you’ll have to take my word on it. 16 homes had been withdrawn and canceled, 12 were taken off temporarily, 69 homes are contingent, which means they have an accepted offer but are waiting for inspection, appraisal and or other criteria before the move forward with the final purchase. 5 homes also show as expired.
You may ask yourself why didn’t I go from January 1 to January 31 and February 1, to February 29th. Simple; our official “Shelter In Place” orders came on March 20th and to better understand the impact we have to be specific to the timeline.
February 2020 continued with strong indicators the Spring was going to be an awesome time to be a real estate agent. Prices are going up, the number of homes sold grew substantially and our interest rates were hitting rock bottom. 3% or even less on a few occasions. We continued to see a good -2.8% in the sold price vs. the listed price. While the average listed price remained very similar to the month prior we do see an uptick in the sold price. In this time period, we sold 395 homes compared to 360 a year ago the same period.
Here’s how the sold homes shook out. 89 of those homes sold for their listed price whereas 53 that had been sitting on the market for more than 120+ days finally sold at an 11% discount. Perhaps buyers could learn from this statistic that if you want a bargain and or wish to save money on your offering price do so on homes that have been sitting around for a while.
We are chugging along just fine at this point until we look up the “Temp Off Market” properties. This was 16 which is substantially more than normal and 16 more than the previous 30 day period. Even more alarming is the 53 homes “Withdrawn And Canceled” during this period. They started to warn us of being locked down right around March 13th, so I can say firmly these off-market homes are a direct result of fear of what is coming. 19 homes expired their list period at this time as well.
Maybe it’s just me but can you guess what stat is alarming? If you guessed “45 Sold” then you are right. A total of 498 new homes went up for sale in Solano County from February 20, through March 19th. Yet only 45 of these homes sold? We know from the above data that 395 total homes sold during this period but only 45 of the newly listed homes sold during this period. 181 homes remain for sale, 103 are pending and 169 are in the other category which breaks down like this. 114 homes are contingent, 27 withdrawn and canceled and 27 temporarily off-market. As we break these down it’s not as alarming when we combine the pending and contingents we see most of the inventory was put into a contract. Only 54 homes were taken off.
We are really 16 days into the pandemic lockdown and are only scratching the surface as to its impact on the housing market. Having closed on 163 homes we can do the math and see that in the best of circumstances and we stayed the current pace over the next 14 days selling on average 10.5 homes a day, that our 30 days number will still fall far short of the 395 sold in the month prior. Compare this to 2019 numbers where we sold 420 homes during the same period. Normally we would be selling more and more homes each month until late Summer when we usually start to decline until the beginning of the new year.
Our average prices continue to go up. However, our listed inventory is far short of the 386 taken in the same period last year. Almost 1/2 of homes have been listed in the last 16 days since our “Shelter In Place” orders. More importantly, is the actual numbers of escrows 19 pending, 22 contingent and a combined 8 off-market and or withdrawn and canceled. 129 remain for sale.
As I stated when I started this article it is really early. With all indications pointing to a very slow couple of months at best. The next two weeks and even months will give us a much better view of what we can expect. Many think this will be over in a month. That we will all be able to go back to work after April 30th. And some believe the housing market will explode with lots of pent up demand. For me, it’s still too early to tell. I see solid indicators that April 2020 is going to go down in history as one of the slowest months in real estate.
My colleagues and I are taking every measure available to ensure a safe and healthy process when we are conducting business. We wear booties when we are out at properties, gloves, masks, we carry hand sanitizer and disinfectant spray to clean up before and afterward. We are maintaining our social distance and doing all we can with online technology. One thing remains true, people have to sell and people have to buy.
If you have questions I am here and always available to help where I can. Stay home and stay safe.