Topping the heap as one of the most popular questions for homebuyers everywhere -- "How Long Has That House Been on the Market?" has numerous implications.
Upon hearing that a home has been on the market for a lengthy period of time, most people make one or more of the following assumptions:
Typically, when a home is on the market for a significant amount of time, over and above the average time on market in a given area, that's a strong indication that the home is overpriced. Many sellers do themselves an injustice by overpricing their home for sale at the beginning.
There may be several reasons why sellers overprice their homes:
For realistic advice on pricing your Northern Virginia or D.C. home, CLICK HERE FOR A PRELIMINARY MARKET ANALYSIS OF YOUR HOME'S VALUE.
As a buyer seeking property either for your residence or as investment, you will most likely find that homes that have been on the market a long time rarely have anything truly wrong with them, except the price. Properly motivated sellers will likely be much more willing to negotiate on price and other terms when there home has languished on the market for months. You should start by researching the average amount of time that homes spend on the market in the community that you wish to buy. For example, take a look at this article about Alexandria, Virginia: How long does it take to Sell a Home in Alexandria, Virginia?
When you look at homes that have spend an above-average amount of time on the market, you are likely to be able to find and negotiate a good deal.
Currently, the average time on market varies throughout different parts of Northern Virginia, but generally ranges from about 3 months to 5 months, depending where you look.
As of the end of January 2008, there are 117 homes within Alexandria, Arlington, and Fairfax County that have been on the market for over a full year. Of these homes on the market for 365 days or more, 50 are priced in the million dollar plus range. However, there are homes ranging in price from $195,000 to $14 million that have spent this much time on the market.
Perhaps you can get a great deal on one of these:
LIST PRICE DAYS ON MARKET
ALEXANDRIA CONDO 2 BR 2 BA $419,900 377FAIRFAX STATION HOME 5 BR 4.5 BA $848,967 511
MCLEAN TOWNHOUSE 3 BR 3.55 BA $850,000 590
ALEXANDRIA COLONIAL 5 BR 4.5 BA $930,000 511
MCLEAN HOME 4 BR 4.5 BA $1,649,000 394
FAIRFAX HOME 5 BR 5.555 BA $1,798,777 499
GREAT FALLS ESTATE 5 BR 7.55 BA $3,095,000 391
START YOUR SEARCH FOR A HOME IN NORTHERN VIRGINIA TODAY
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Brian Block is proud to serve the Northern Virginia real estate market. View his website for the latest listings and homes for sale in Northern Virginia and search all active homes.
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Brian, I tell clients that a long Days On Market can mean opposite things. It can mean the price may be negotiable now - or it can mean that the seller has been intransigent, and still is.
Brian, the market is what the market is.
One situation I am seeing more and more is overpricing due to 2004 expectations of revenue income from the sale based on how much equity the seller had counted on being able to pull out of the property when they sell it. Same old story, but many of the folks have built other homes or made retirement plans based on these assumptions and are between the proverbial rock and the hard place. They really need the equity, but it just does not exist.
Brian,
Some people just won't understand that the buyer make the market..it's what they are willing to pay in this market. The prices will go down because buyers make lower offers and if the sellers accept them ...well then values go down.
For example my seller got her price she wanted but it appraised for 19K less so she had to decide if she really wanted to wait and hope the value goes up or sell it at the new price. Unmotivated sellers will-just be wasting their time unless someone is willing to pay cash and not appraise and that will only cause the domino effect....we had it crazy with high numbers well now we have the low numbers. Thats why homes sit for longer periods now because they aren't getting anyone willing to pay high.
There is now 9 months of inventory in the US...17 on FL.
BRIAN: Your advice is sound. Days on Market can mean many different things depending upon the situation.
GARY: Thanks.
KEVIN: In that situation it is important to educate the seller as to the value today and make it understood that nobody owes them the equity that they had. Prices can go down, just as they can go up -- even though people don't want to believe that when they are in the position of selling.
NEAL: Thanks for your comment. The buyers do indeed make the market. A house that is not priced right will not budge. That's a lot of inventory in Florida.
A great many agents and buyers simply "though out" properties with excess Days on Market. They assume one of the things you mentioned. Many Sellers don't have a chance appealing to those agents and their clients.
I also look at the latest price drop along with DOM. If it's been on the market 300 days and has not had a price drop - that tells me more than just 300 days on....
Thanks.
Donna Sandstad
JAMES: Thanks for adding your comments and thoughts on the issue.
DONNA: You're welcome.
Brian ~ Great Post! I've had a home on the market for 6 months now. 1 offer, about $20,000 below asking, no reduction in price. Yes the Seller wants to sell but as he puts it..."I'm not going to give it away.." It's tough in Oklahoma. In most areas it is a buyers market however as stated earlier in a comment if the buyers are permitted to drive prices down by offering low and getting in, they will be dictating the market values and they will fall. My Seller is pleased with what I have done and is aware of the market right now and patient enough to hang in!
Brian - An excellent presentation of the market conditions in your area tied in with some educational information for potential purchasers
Great post with nice graphics & good points for your readers!
KELLY: Thanks for your comment and compliment. The shift in market and mentality is tough for some sellers to handle and some buyers think that it is open season for "house-lifting." The facts remain that though it is a buyer's market, buyers are still not going to steal a home.
KATHY: Thank your for your kind compliments.
KELLY: Thanks for your comment and compliment.
Brian, you're so right about that being the number one question. In addition to price, a lot of houses are just too hard to show - Realor eating dog, call the agent a week in advance and schedule the showing when the moon is full, and oh, yes! Don't forget you have to wear a purple tie!
PATRICIA: Yes, those hard to show homes often spend lots of time on the market too!
Brian, I like the way you tied your data in with your marketing. There is a lot of education that both buyers and sellers need in this market. I find that often the higher the price, the more restrictive the showing instructions--and higher the DOM. I hope you generate some business from this post; it was well thought out and presented. I am going to bookmark it.
HOLLY: Thanks for your comment. I appreciate your compliments and your bookmarking the post.
A. POTENTIAL BUYER: Great plan, except how are you going to organize all the buyers in the area to collaborate? Some people don't have time to wait and need to purchase homes now.
A. POTENTIAL BUYER: Good luck with your price lowering campaign. Please let me know how it turns out. Honestly, I agree with you that prices will need to come down more. Nobody is owed the equity they may have once had in their homes and now lost. The sooner they recognize that, the better for all of us, buyers, sellers, and Realtors.