Active inventory rose 6% while new pendings fell by 8% in August. Supply levels are still low (about 2 months) in lower and middle price ranges, but jumped to over 5 months in the $400k-$800k range, and to 14 months in the >$800k range. With 749 listings priced over $800k, there were only 52 new August pendings and 52 closed sales. High-end sellers are competing for fewer buyers with more lofty expectations. They have to package and price accordingly.
Feast or Famine
With rising values and short market times, the 2017 Southeast Michigan market has been kind to sellers with properly packaged and priced listings. Competition for the best properties and sifting through limited and pickedover inventory, however, has been tough on buyers. “Properly packaged,” equates to well maintained, move-inready, and the detailing done. Appropriately priced means the condition and location have been taken into account and the price is set to excite buyers to write strong offers quickly before another buyer has a chance to outbid them. Sellers who packaged and priced appropriately have frequently been rewarded with quick sales—near or over asking price. Over the past three months, 48% of all closed Southeast Michigan transactions had accepted offers within 10 days of listing. Although higher-end homes generally take longer to sell because fewer buyers are qualified to buy them, 31% of the closed >$500k sales had accepted offers within the first 10 days. While every local market, price range and home are different, the “Closed Sales” table provides a summary based on three price range columns and three rows of market time ranges.
Not all sellers have enjoyed the feast. Many sellers whose homes are still on the market are wondering how they missed out. Heading into September, there were 12,086 available homes for sale in the 5-county Southeast Michigan market. While nearly half the recently sold homes sold in less than 10 days, 64% of the available active listings have been on the market more than 30 days. Average market times shot up for the group of homes that didn’t sell in the first 30 days. Average market times for >30 day listings priced under $200k kicked up to 107 days. In the $200k-$500k range, they jumped to 131 days, and for listings priced over $500k, 192 days. The higher the price point, the greater the potential a listing has for falling into the >30 day black hole. Of the current active listings, 57% of the <$200k listings, 63% of the $200k-$500k listings and 83% of the >$500k listings have been on the market more than 30 days. Many of the over-priced or under-packaged active listings will still be on the market next Spring unless they undergo significant pricing or detailing makeovers. Today’s buyers want everything done and they are willing to pay for it. There’s a reason that about half of the recent closed sales sold in 10 days or less— most of those homes were in great condition and/or priced to motivate buyers. Buyers wrote their offers quickly and gave sellers what they were looking for before someone else could.
The best way to maximize both the speed of sale and the sale price is to package and price with the intent of exciting buyers to the point where they are afraid of losing the home to another buyer.