The expired listings I am using are the ones that have expired so far this month, August. When I ran the report this morning, it showed 64 such expirations so far. According the data... wait a minute... I'm forgetting something. Oh yeah... the disclaimer...
Disclaimer... all data compiled for this report comes from the WARDEX Data Exchange and does not include any sales activity from outside that resource. All research is done only on single family homes and there is no inclusion of modular homes, commercial properties, or vacant land. The geographical area researched includes; all areas within the boundaries of the city of Kingman, north Kingman, the Hualapai Mountain area, and the Valle Vista subdivisions. Click here to see maps of the included area's.
Now back to what I was saying, according the data these expired listing were on the market for an average of 414 days. Well over a year.
What do we know about the last year of this housing market?? Well, you are all free to editorialize all you want, but specifically the monthly average and median price figures have been noticeably lower over those months when we look at them in terms of year over year performance. We also know that sales in units is down to recent historical lows and that it is probable that 2008 will see less in total sales than 2007.
Basically the formula of holding price until the right buyer happens to come along is not working out all that well.
In the two monthly reports I offer each month I include information on the average home that is either newly listed in the previous month, recently found a buyer and is under contract, and obviously homes that actually sold. I'm leaving the sold data out of this as I think that newly listed, under contract, and expired listing data provides all the stark contrast needed.
Let's take a quick look at the average home from the different sets of data...
Units in July that were newly listed had 3.21 bedrooms, 2.2 bathrooms, a 2.0 car garage, included 1716 square feet of living space, and was built in 1994.
Units in July that attracted a contract from a buyer had 3.14 bedrooms, 2.1 bathrooms, a 2.0 car garage, included 1596 square feet of living space, and was built in 1994.
Units that have expired the listing contract so far in August had 3.17 bedrooms, 2.14 bathrooms, a 2.19 car garage, included 1686 square feet of living space, and was built in 1999.
Not much difference in the three average units, with the exception that the expired listings were newer by 5 years on average than new listings and listings under contract in July.
Now let's compare the average and median price for the three data sets...
Units listed in July...
Average asking price - $204,452
Median asking price - $165,000
Units under contract in July...
Average asking price - $157,439
Median asking price - $130,000
Units expired so far in August...
Average asking price - $225,599
Median asking price - $214,900
The data speaks for itself... and it certainly does not need 414 days worth of explanation.
There is no denying that this is an uncertain market. There are no guarantees that a buyer can be attracted at any price offered. But there is an identified pricing 'sweet spot' in this very market that sees successful activity each and every month. I still maintain that price is the overall number one factor in generating serious activity needed to produce a successful sale. Some might argue that 'location, location, location' still is... but with an estimated 14 months of inventory on the current market chances are 100% that all locations have plenty of listings to choose from.
Folks... unless you missed it somehow... this isn't 2005 any longer. The market has completely changed.
Perhaps some sellers were counting on that old fabled 'explosive growth' that many already in the community were touting (either hoping for or acting very afraid of... doesn't matter), in hopes that so many people were moving here that demand would somehow catch up with supply. Well, I didn't want to leave this post without at least offering you one chart to look at. In July the Census put out a press release about population growth. There you can find population data for Kingman. I took the data and made a chart to share. A look at Kingman's growth rates...
I get the feeling that when the data comes out again next July that we might see a negative percentage for 2008. Keep in mind that this data lags by a year.
Kinda funny looking at the data from 2006 to 2007. That was the same time that a select few in this community started getting all frenzied up that too many people were moving here and throwing out oddities like 'put the brakes on growth'. Wish granted it appears. People listened.
Whoops... I slipped into political mode there for a second. My bad.
I guess the point I'm trying to make is that new growth is not happening. If sellers are hoping that this community grows itself out of this bad market, it may take quite a bit of time at this rate. It is likely that if you are a seller that you are trying to entice a local resident to move from one side of town to your side of town. Maybe an expanding family that needs a larger home (and is in good enough financial standing to afford it). If you are trying to entice a first time buyer with that average sized home... keep in mind that a first time buyer can rent basically the same home for around $600 to $800 a month (and rents are not going up yet at this time). Compare those rent figures to your mortgage payment.
The local community and the job market is not doing all that well to create new home buyers... especially at current asking prices. And let us not forget about the many foreclosures already and the market and the next wave that will hit the market.
I just hope that reality begins to at least set in some degree with those that have seen their listing periods expire this month. Listing a home at that price level is futile. Odds are better at the river in those big fancy buildings.
Sellers can sell... they do every month. But a couple of questions have to be asked; 1) Do you have to sell?? 2) Can you afford to sell?? If you honestly answer 'no' to either question then it is better to wait for another day (as long as your not facing financial hardships or looking at foreclosure) if you are looking to capture large doses of equity.
If you answer yes, you need to call me and let me tell you about how I can save you hundreds or perhaps even thousands of dollars in real estate fees. <-- shameless plug
To wrap up... your listing period just lapsed and you may be thinking about re-listing the home either with the same broker or a different one (or even on your own), don't pay attention to the new listing price levels... look closer at the units that recently sold (see last months sales report here or wait till the second week of next month for the next report). The solution is in those data figures.