Last weekend a house in my DC neighborhood went on the market. It was the first new listing in its price range to hit the MLS (Multiple Listing Service) in about two months. There were only three others, and those had been sitting since the fall. The house was "open" Saturday and Sunday, and by Monday it was "under contract."
I wasn’t at all surprised by the speed, given that the inventory was basically nil, but I was surprised by the price. A Realtor I know in the neighborhood told me that the house received two offers, but went for less than asking price. The asking price, I thought (and I troll the MLS like nobody’s business) was quite fair. The house was big, renovated and in the best school district in DC.
So why, after only two days on the market, did the seller decide to take an offer below asking? This to me is a real indication that the market has fundamentally changed, not just in the national numbers, but also in the neighborhoods. During the second half of last year, as sales numbers plummeted nationwide, prices continued to inch up. The experts kept saying: prices lag behind sales, sellers are stubborn, it’s not quite a buyer’s market. Welcome to a buyer’s market.
This seller, whom, I have to admit, I have never met, must have been convinced that these two were going to be the best offers out there. Realtors will tell you that once a house has sit for two weeks, the seller loses leverage, but two days? To me, at least, it seems a bit drastic.
But then yesterday we got the home price index numbers from S&P/Case-Shiller, which tracks prices nationwide. The index showed just a 1.7% increase in the price of a single family home, based on a study of the top 20 metro markets. That’s the slowest rate since they started tracking back in 2001.
"The weakness continues to spread," said David Blitzer, S&P Index committee chairman. "I don’t see any signs of a bottom. Unfortunately it’s still looking pretty nasty from a housing point of view."
While prices went up for the year, if you look month-to-month, prices from October to November 2006 (the most recent data compiled) were actually down 0.4%. Washington, DC prices are down 0.7% in the same time and down 1.9% from November 2005.
So I guess the seller was right to take what he/she could get. What’s heartening at least is that the house sold so quickly. That just proves that the buyers are out there and ready to jump, just as long as they’re sure they’re getting "a deal."
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