While the existing inventory of homes for sale in Northern Virginia has decreased from the significant six-plus month oversupply we had beginning the 2007 sales year, the average number of days on market and the process of getting to the settlement table has become more challenging for sellers and for their agents.
It begins with a longer sales cycle. The average number of days on market for new contracts in the City of Alexandria has expanded to 187 days for listings at $1,500,000 and above. For listings priced at $749,000 to $300,000, the average on market time is about 82 days. Similarly, properties south of the George Washington Parkway in the Fairfax County area of Alexandria City, priced in the $500,000 to $749,000 price range, were on the market for an average of 82 days; and listings in the $300,000 to $499,999 range sat on market an average 71 days. The key watchword is average, as many sit longer. This is in sharp contrast to the market we have had during the past five years, where listings were usually under contract within a couple of weeks, and it is providing new challenges for Realtors. It takes longer to sell a home these days, and the process has become a series of adjustments on both price and terms.
According to Sue Goodhart, top producer for McEnearney Associates in Old Town, Pricing is a challenge. It is hard to know. Comparative market analyses are somewhat unreliable, with the market dynamics changing regularly. If the seller is flexible and reasonable, and the market is telling them the price is beyond what buyers are willing to pay, they need to make an adjustment to the price. Easier said than done. The notion that our regional market could continue its blustery pace of quick sales and price escalations is a notion hard to let go of for many sellers.
During the first half of 2007, over 43 percent of all homes on the market have had at least one price reduction since coming to market, according to data compiled by McEnearneys McLean broker, executive vice president and market expert, David Howell of Mount Vernon. Price is the key to realizing a timely sale in this ever-changing market.
Coldwell Bankers Old Town Office top producer, Donnan Wintermute, said, We are in a very price driven market. If priced appropriately, it will sell. Pricing is the key issue.
It is a good time for buyers, with lots of inventory, good values and still-low interest rates a good time to jump into the market.
The road to settlement is more time-consuming, reductions in price are almost a normal part of the sales process and sellers are increasingly subsidizing the adjusted prices with incentives for the would-be buyer, to the tune of .81 percent of sales price. According to Howells analysis, this trend affected 53 percent of sales for the first half of the year.
Educating our clients to these market trends is providing an ongoing challenge to all of us in the real estate business. However, it is an integral and key part of the new sales dynamic.
The indicators of the sway of the market tell us once again that it is not we who speak to the market, but rather, it is the market that speaks to us. Those who listen early on and price to the market out of the gate usually have a quicker sale, and often a better return on their investment.
Jeni Upchurch is a full-service Realtor with McEnearney Associates of Old Town and a former Assistant Secretary of HUD. She can be reached at 571-216-6701.