More Homes For Sale, But Still Not Enough for Waiting Home Buyers

The April real estate numbers for the Scotts Valley area are out and it was a month with rising inventory and a surge in pending sales from 21% on April 17th to 38% at month’s end. Much of the jump was the fact that many new listings came on the market in April that took 10-14 days to go into a pending sale status.

April averaged one new listing per day for a total of 30 new listings, which was up from .71 in March, which had 22 listings for that month.

A very telling stat was the fact that 46% of the new listings that were reported in April are already pending or closed sales.

The average list price for single family active listings, homes that have not yet sold is $1,027,135 for a 2,537 square foot home anywhere from 3-5 bedrooms, 2-2.5 baths.

The average list price for single family pending sale listings is $809,513 for a 2,161 square foot home, usually 3-4 bedrooms and 2-2.5 baths.

Condo-Townhouses

The condo-townhouse market saw a slight increase in listings and as of today’s writing, May 6th, there are 3 active and one pending sale. Active condo-townhouses are averaging $470,000 for a 2-3 bedroom, 2 bath condo-townhouse. The one pending sale is a 2 bedroom, 1 bath condo priced at $375,000 which went pending in only 10 days. The active condo-townhouses have only been on the market for an average of 9 days and I expect all to be in pending status sometime this month.

Closings

There were a total of 15 closings in April with 8 being single family homes with an average sales price of $852,875. The average list price was $860,875, which means that single family homes sold for 99% of their asking price on average.

7 condo-townhouses sold for an average sales price of $470,929 with an average list price of $463,400, which means condo-townhouses averaged a sales price of 102% of asking price. Condo-townhouses remain the hottest commodity on the market today.

The Verdict

As predicted, and not as if I was going out on a limb, there are more and more homes coming on the market as we head towards summer. In fact, as I was writing this report, 3 homes went on the market today and that is no exaggeration. I went to gather a few more figures and actually saw inventory go from 72 to 75 homes for sale in the Scotts Valley area in the blink of an eye.

Price your homes accordingly, as I have been saying for some time. There is a price point that buyers will and will not enter. It is not rocket science, but it is a science when it comes to pricing homes because we as REALTORS® must know and understand our market and inventory. I study, analyze and dissect the market daily, it is my job to know more than my clients, that’s why they hire me. Over-pricing does not pay, it costs sellers and agents in the short run and in the long run. You must be IN the market and not just ON the market.

Here is a common time-line for over-priced listings:

overpricedDay 1-10: Euphoria in the neighborhood because everyone thinks their home shot up in value because you listed your home at a really high price, higher than what the comparables show. The neighbors are throwing parties in your honor.

Day 10-30: OK, where are the offers? Hmmm…

Day 31-60: You ask your agent: “How is our marketing plan coming along? Any feedback from agents who are showing the home? What do you mean agents are not showing the home? That’s ok, I will wait.”

Day 61-90: Alrighty then… You are getting a little anxious. You start asking yourself: “Did we overprice our home?” Neighbors are putting their homes on the market for less and are selling. (Those neighbors are silently thanking you for helping them sell their home) Buyers are thinking something is wrong with your home because it has not sold in a hot market.

Day 120: Neighbors are once again throwing a party in your honor, because their sale closed and your over-priced listing helped them sell their home. Interesting how things always come full circle.

The above scenario is what happens every time you over-price your home. You will have a very difficult time under-selling your home in a hot market because it will generate a lot of offers and the market will ultimately determine your value. More offers means more competition, resulting in top dollar. No offers mean, well… no offers. Resist the urge to over-price, it has never been a good strategy.

Interest Rates Rise Slightly

With the recent report of lower unemployment rates and good economic news, interest rates edged up slightly from an average of 4.26% last week to 4.35% this week, up .09 basis points for a 30 year fixed rate conforming loan. A 15 year fixed rate loan is averaging 3.28%, down .02 form last week’s 3.30%.