Yesterday, Boston.com rightly blogged, Holiday season a gift for frustrated buyers. Since there were so few comments and fewer facts, here’s a snapshot of what happened with single-family (SF) homes during the past month from a sample of six highly desirable towns within reasonable commuting distance to downtown Boston:
1. Only 6 of the 75 MLS listings currently UAG (under agreement) had reduced their prices by at least 5% before going under agreement during the past month (Nov. 2-Dec. 2, 2013).
2. However, when you look at homes which are CTG — a new MLS status which indicates sales contingent on satisfying an inspection or signing the Purchase & Sales contract, the frequency of SF homes going under agreement for at least 5% off their original price has increased fourfold from 8% to 30%.
3. The mix of homes selling most recently — ie. those listed in the MLS as CTG rather than UAG — have a lower original asking price, a median of $630K vs $700K. While the difference in median list prices should not be interpreted as a 10% price reduction on these 33 MLS listings, actual sales prices are likely to reflect deeper savings as stated next.
4. Price reductions have been growing as reflected in CTG status properties. Compared to UAG listings, CTG properties had reduced their last asking price an additional $9K before accepting an offer — the median price reduction on UAG listings was $16,4000 vs $25,400 for CTG’s. Actual savings and ratio of original asking price to sales price will not be known until closing, but it’s safe to bet that industry stats will reflect those falling prices in January 2014.
5. Only 16 of 108 homes currently under agreement or contingent status had reduced their price by at least 5% before an offer was accepted by the seller — that just 15% or one in seven MLS listings.
6. Significantly, more than three times that many — 50 homes — which have EXPired or been CANceled during the past month in the same six communities have effectively discounted their asking prices by at least 5% because there are no longer any real estate agents involved.
7. However, hopes that EXPired or CANceled listings may represent deep discounts were dismissed by our snapshot. Even though one in five EXP+CAN listings had already reduced their asking prices by at least 5%, their median asking price of 21 EXPired listings was still $919K — that’s $289K or 46% higher than the homes currently in CTG status.
8. Likewise, the median price of the 30 CANceled listings in the six towns was $750K, or $120K (19%) higher than the 33 homes currently in CTG status.
9. Those homeowners who have withdrawn their listings may be the most unrealistic expectations of all, as they have been more reluctant to reduce their prices substantially, and their $967K median asking price is $337K or $54% higher than CTG sales.
10. According to our analysis of listing data between 1996 and 2002, one in five Massachusetts properties that went under agreement between Thanksgiving and New Year’s Day sold for at least 10 percent below the original asking price. While our preliminary snapshot shows increased savings in the six desirable towns surveyed, deep discounts experienced in the past are unlikely this year unless sellers are surprised by the direction of the housing market heading into 2014 and conclude their homes are overpriced.