Ten day 4th of July forecast: Expired or canceled listing every 4 minutes across MA!

Exp+Can_July1994_2008

If recent trends continue, over 3,500 MLS listings across Massachusetts will expire or be canceled listings over the next 10 days (ending July 5, 2009). That’s an estimated 350 per day, or an amazing one every four minutes.

What does that mean to real estate consumers? Home buyers, who have been timing the housing market, will be able to make offers directly to sellers at reduced prices; sellers can offer their homes at reduced prices and net the same profit. The ability to buy and sell without paying the traditional, two-sided real estate commission could bring some stalled transactions together, as stated in the blog comment below. Think of it as a “commission-free” holiday for home buyers and sellers.

Many times homes will sit on the market and do not sell [because] the seller is held hostage by the commission amount factored into the price. The house might have sold, but that $50K or $100K commission is the 800 lb gorilla in the room. The seller can’t budge and the buyer often can not stretch to come up with that amount for both sides to make a deal happen in these days of expensive and tight credit. (From comment #20 on recent Boston.com blog post.)

If you are a buyer, sign-up to received daily email updates of expired and canceled listings.

If you are a home seller, we can help in two ways. First, if you are interested in selling “for sale by owner,” join one of FSBO seminars or visit our FSBO wiki. If you’d prefer to work with a listing agent, either traditional full fee or discount service, find out how our “Listing Agent Report Card” can help you select the most effective listing agent based on recent MLS statistics.

Here’s what expired, canceled, and temporarily withdrawn listings have looked like across Massachusetts during June and July over the past 15 years, 1994 to 2008.

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CARPE DIEM: Expired & canceled listings create “commission-free holiday” for buyers & sellers

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Massachusetts home buyers, if you have been waiting for housing prices to slide into your acceptable range, this could be time to "carpe diem."  As shown in the graph above (click for larger image) of MLS activity during June & June over the past 15 years (1994 to 2008):

  • The number of off-market properties — expired, canceled & temporarily withdrawn listings — surged to a new record of 16,319 properties just after midnight.*
  • In contrast, sales have fallen from a peak of 19,180 in 2006 to 12,335 in 2008 (as of 12:30am, August 1). 
  • That means that sales are down by about a third, while off-market listings have nearly doubled since 2005 when we first wrote that expired listings were a leading indicator of the real estate bubble.
  • Over the past three years (2006-2008), more properties have been pulled off the MLS than sold during June & July.  For every three listings closed in the past two months, four were pulled off the MLS statewide in Massachusetts.

What do these raw numbers mean to buyers and sellers?  Think of expired and canceled listings as a two-sided window of opportunity, or the real estate equivalent of a "tax-free holiday."  Sellers can accept an offer about 5% less than their last asking price and still net the same profit because they are no longer obligated to pay a traditional real estate commission.

Will this "commission-free holiday" be enough to motivate buyers to make offers, or will motivated sellers in Greater Boston begin making offers to well-qualified buyers as is happening in other markets? 

The Real Estate Cafe is advertising buyers on Zillow to make it easier for motivated sellers, particularly those who have received pre-foreclosure notices, to find them. If none of our buyers wants to purchase your home, we offer seller services "a la carte" on a fee-for-service basis.  If you’d like to learn more about how to sell your home "for sale by owner," we’re organizing a FSBO support group and invite you to see our "FSBOs on Steroids" presentation.  If you’re not interested in selling on your own, we’d also be glad to do a Listing Agent Report Card to help you select a new listing agent and try to negotiate a reduced commission.  Email for more details.

* Technical note:  Includes all residential property classes in
MLSPin:  single family, multi-family, condominiums and land.
Temporarily withdrawn listings available for 2008 only.

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