Stuck! Homes Sit Longer on the Market

Stuck! Homes Sit Longer on the Market

It's taking longer to sell a house these days. Is this another sign that the boom is over?
By Les Christie, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- The tell-tale sign of a stagnating real estate market? When homes for sale start lingering - and that's exactly what real estate brokers and other industry watchers say they're seeing now.

The National Association of Realtors does not maintain national time-on-market figures. But inventory - the number of homes for sale - spiked 37 percent for the 12 months through April 30, the most recent data available.

Homes are staying on the shelf longer.

There are no official regional statistics for the time homes spend on the market. Here are estimates for local brokers.
Market Time on market Up from
Hanover, NH 125 days 65 days
Napa, CA 60 days 10 days
Phoenix, AZ 60 days 7 days
Miami, FL 35 days 20 days


At the same time, the rate of sales has slowed, so that there is now 6 months worth of supply, up from 4.1 months a year earlier.

All that supply means homes are sitting around longer and that sellers are asking more than buyers are willing to pay -- an indication that prices may have to come down.

"Sellers are in denial, and there is a rising disconnect with the buyers," said Jonathan Miller, a real estate appraiser in New York. "Until sellers get the message, you'll see a drop in the number of transactions."

Philadelphia has seen only a modest run-up in time-on-market from about 23 days last year to a still low 33 today. But the city's inventory has grown from nearly 21,000 last year to more than 36,000 today, a more than 50-percent jump.

"The sales pace is identical, but inventory is way up," says Harry Caparo, who runs Coldwell Banker Preferred in Philadelphia. "Time-on-market is going to start to rise."

Two markets

The cool or steady markets seem to be maintaining their equilibrium. David Barnes, a broker in Nashville, Tennessee, says time-on-market there has risen modestly this year to around 75 days from 65 days.

Carolyn Heimlinger, a broker in Des Moines, says the figure there is about 82 days, up from 75 days a year ago. Prices have flattened but not dropped. "Where I see concessions is new constructions," says Heimlinger. "Developers now offer rebates and free upgrades."

In Charlotte, N.C., Wallace Perry, president of Coldwell Banker United for the area, says time-on-market hasn't changed much, at 85 days to 90 days. "It's a very good sign that the market here is holding steady."

But in once superheated markets, things have gotten tougher.

In Hanover, New Hampshire, broker Ned Redpath reports a "drastic" increase in time-on-market.

All through the 2000s, New Hampshire averaged double-digit price increases and about 60 to 70 days on market. Now Redpath estimates average time-on-market at 125 days. He expects price changes to soon reflect that.

"The longer a listing is on the market," he says, "the more the price will come down."

In once white-hot Napa, California, Coldwell Banker broker Doug Fowler reports an increase to between 60 days and 90 days, where they once were a week or two. He thinks the long-term prospects for Napa are fine, but the area could see short-term adjustments.

Boston time-on-market has gone from 52 to 58 days, according to Susan Hsu, a RE/MAX broker.

In Phoenix, according to Valley Wide Homes broker Ron Wilczek, time on the market was often less than a week in 2005. Now it's approaching 60 days.

And in Miami, the time-on-market has lengthened to between 30 and 40 days from about 20 just a few weeks ago, according to Mario Tome, of Greater Miami Realty.

All this is evidence that the real estate boom may have run its course in many hot markets. At the very least, sellers will have to set their prices very carefully if they want to move their properties quickly and avoid long months of having their houses spending time-on-market.





1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

The Housing Bubble Has Burst In California

The Housing Bubble Has Burst in California
By Joe DiPaola

Trying to sell your California home in the Summer of 2006? Actually, you are about a year too late. The following are my doom-n-gloom impressions of the California Home Resale Market, and the California economic outlook for the Summer and the rest of 2006.

Loss of Confidence in the Housing Market by Buyers:

Buyers have lost confidence in the housing market. Buyers seem unwilling to purchase, apparently because they do not believe that their savings/investment is protected. A $50,000-100,000 down payment on a $500,000 home can easily be wiped out a year from now by a rapidly declining market. So, a Buyer is only entering the market if the Seller has heavily discounted the price---enough to effectively insure against that kind of loss. Price, in my opinion, is the only thing driving the sale of a house in California today.

Increasing Panic By Sellers:

Yes, panic. Sellers are beginning to panic. They were used to seeing homes sold in 5-10 days. Now, even with signifiicant price reductions on their part, their homes are sometimes sitting unsold for 60 days or more.

Inventory is Building:

Inventory is building. In MLS regions where I do most of my selling, the ratio of homes coming on the market to homes being sold is 2.5:1 or 3:1, and growing.

Bottom-Feeder Buyers are Prowling:

From my own experience, I see "bottom-feeder buyers" on the increase---Buyers who mass-produce drastically low-ball offers to try to steal houses from Sellers. It only takes one distressed Seller out of 20-30 mass-produced offers for them to make a profit. And, if even one Seller accepts their offer, then it establishes a new comparable in that neighborhood, putting even more downward pressure on prices for everyone else trying to sell in that area.

There is Nothing Coming on the Near-Term Horizon To Improve the Situation

If anything, it is my opinion that conditions will worsen for Sellers. There is no bottom, or even temporary floor--in sight. The off-season is ahead. Demand continues to fall, while supply continues to increase. Interest rates continue to rise (although rates are, in my opinion, only a small part of the problem). Buyer and Investor confidence in the market continue to erode. Sellers are getting more desperate. The price reductions are getting bigger, and coming with greater frequency.

My California Home Sales Forecast

My California forecast for the rest of 2006 is for a much slower California economy, led by a rapidly declining housing market, and a declining stock market.

I am predicting a substantial decline in average resale home prices, and a substantial increase in time on the market.

It's hard to predict exact timing and duration, but I predict that the declines will generally occur in waves. For example, I see:
In Northern California:
- Sacramento and San Joaquin Counties declining rapidly
- Other Northern California Counties following suit
- San Francisco, San Mateo, Santa Clara declining more slowly
In Southern California:
-Riverside, San Bernadino, Orange and San Diego Counties declining rapidly
- Other Southern California Counties following suit
- Los Angeles County declining more slowly

I am also greatly concerned about the amount of "creative" home financing which has occurred wholesale over the past few years. A significant number of Sellers marginally qualified as Buyers themselves, have no equity in their homes, and/or have mortgage payments that are becoming increasingly difficult to make. The default/foreclosure rates could balloon---in direct proportion to the fall in housing prices.



1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.