Dark New Trend Discovered During Housing Inventory Analysis
I conducted a housing inventory analysis of the Tallahassee MLS in order to discover a pattern that might help explain a strange new twist being observed in home sales in Tallahassee.
Over the past 7 months, we have observed an improving trend in the number of homes going under contract each day, yet we have not really enjoyed the corresponding number of closed home sales being recorded.
By conducting a housing inventory analysis, we were able to discover a dark new trend that all home sellers should understand.
In the real estate graph above, we can observe that there is a vast difference between arms length homes for sale and distressed homes for sale in Tallahassee.
Only about 1 in 5 arms length homes for sale are already under contract, whereas more than half of all distressed homes already have one or more contracts in place.
I believe this is a picture of the problem. Our housing inventory analysis shows that distressed homes go under contract quickly, but getting them to the closing table often takes so long that the original buyer backs out before the seller's lender is ready to respond. Thus, distressed properties are seeing more contracts than closings by a large margin.
Housing Inventory Analysis Uncovers Patterns
When we drill even deeper into the housing inventory analysis, we can observe the difference ways a home can be marked "under contract." A status of "Contingent" means there are many factors that could unravel the sale, while a status of "Pending" should mean that only time and appraisal really stand in the way of closing.
The real estate graph above shows that arms length home sales have a much higher ratio of pending to contingent homes in the inventory than do the distressed home sales. I believe this supports the conclusion and observations that many buyers are falling out of contract before all contingencies have been removed.
Housing Inventory Analysis For Home Sellers
If you want to sell a home in Tallahassee, then you should recognize this growing trend of contract failures. You should ensure that your real estate company does everything possible to:
- qualify the validity of the buyer bringing an offer
- continue to market your home for sale while in a contingent status
By vigorously marketing the home for sale even after a contract has been received, you won't be losing time (in a declining market) if the contract falls apart.
Our housing inventory analysis suggests this trend has been brewing for nearly a year, and with the number of distressed properties for sale in Tallahassee, home sellers won't see it go away any time soon.
If you want to know how to use the results of our housing inventory analysis to help you sell your home, just drop me a note and we can schedule a time to review your specific situation and needs.
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