What do Expired Listings Teach?

I checked the expired listing count in Stamford this week. Since January there were 254 expired listings and 827 listings that closed. These numbers include single family homes and condos. If you just look at single family homes, 432 homes have closed and 151 have expired. I check these number from time to time and they tend to be consistent over the years. Roughly 30% to 40% of homes expire without selling in their first listing term, year after year after year.

Many people think that the primary reason expired listings don’t sell is price and that is technically true. However, to leave it at that does not tell the whole story. If expired properties were listed at a higher price per square foot on average, the story would be that simple. However, expired listings are generally not listed at a much higher price per square foot. In fact, since January the median sold price per square foot was about $230 in Stamford and the median price per square foot for expired properties was $225. The average agent is looking at homes of similar size and pricing “soon-to-be expired” listings accordingly.

If the initial list price per square foot of expired listings is not generally outrageous, why do so many agents miss the mark on pricing them each year? My observation is that they have a great deal of trouble adjusting for home factors that have nothing to do with size. These factors include awkward or unexpected floor plans, poor light flow, and deferred maintenance projects that buyers are not interested in taking on. The difficulty in explaining the impact of these factors can’t be overestimated, so many agents avoid talking about them with their sellers. Other agents choose to address these factors weeks later after they have priced the property incorrectly, conducted weeks of marketing that target the wrong buyers, and let the initial excitement about the new listing die down, never to be recovered.

My approach to this topic entails full disclosure before listing a home. By offering to tour similarly sized properties with my seller clients I provide them with a context for pricing that can take into account differences in floor plan, design, lot condition and maintenance. I also explain the real risks involved with pricing that does not reflect what buyers and appraisers are actually evaluating beyond size. The best buyers for your home (those that can and will pay the most) will not get exposed to it and your home will be constantly competing with homes that show better. Finally, I encourage discussions about challenging floor plans and maintenance issues, since it is a good opportunity to put many heads together and address everything that impacts a showing before the home is listed. I have seen ways that furniture can be added and rearranged to improve the flow of an awkward floor plan. I have had architects and contractors offer alternative designs and pricing that help buyers see more potential. I have also worked with sellers to get on top of the maintenance issues that buyers fear most.  These solutions can keep buyers interested in a home that they might have otherwise overlooked.

We know real estate value is about so much more than size, so it is important to address the bigger picture. Ignoring the myriad of factors that impact perceived value is not wise, unless your goal is an expired listing. Since every buyer eventually becomes a seller, I make sure my buyer and seller clients tour enough homes to see the correlations between price and factors unrelated to size for themselves.

Ensuring my clients are well-informed before they make important, irreversible decisions is a priority. Some sellers might still want to price too high, wish for luck and accept the negative consequences of being in the wrong price category. Others might price to generate the most traffic and excitement among agents, which usually brings the highest possible sales price. Unless a property is in the extreme luxury or custom designed category (in which none of the above applies), I encourage sellers to go in the later direction.  In the end, a list price is the seller’s decision, but it should never be misguided because important and challenging conversations are avoided.

Mid-Year Report 2016 v. 2017 Single Family and Condo Sales – Stamford, CT

Jan – June 2016 Jan – June 2017 Percentage Change
SF Total # Sold 320 343 +7%
SF Median Sold Price $562,500 $600,000 +6%
SF Median Sold PSF $254.02 $260.51 +2%
Highest SF PSF $1,020.41 $840.41  -17%
Lowest SF PSF $119.64 $98.11 -17%
CN Total # Sold  304  318  +4%
CN Median Sold Price $313,000 $290,000 -7%
CN Median Sold PSF $243.48 $250.29 +2%
Highest CN PSF $727.49 $546.32 -25%
Lowest CN PSF $104.17 $94.74 -9%
Highest SF Home Sold Price $3,100,000 $3,702,500 +19%

Observations:

The good news this mid-year is that sales volume is not declining for single family homes or condos compared to last year. Demand is outpacing last year by 7% and 4% respectively, even though demand for homes is weakening nationally. In regard to prices, the median price PSF for single family homes in Stamford is up 2%, so we are still seeing a gradual, sustainable improvement. Condo buyers are still applying smaller budgets in general reflected by the median price decline of 7%, but they are also paying slightly more per square foot. This reflects a continued focus on condition, location and floor plan as factors that are just as important as size. It is still a great time to buy.  Prices are affordable compared to area income and mortgage interest rates continue to be historically low. This will not be the case forever. Check out the stunning homes with the highest sold price for both mid-years linked below. I have also included homes that reflect the median, highest and lowest prices per square foot.

Click here for homes that reflect the median closed PSF for Mid-Year 2016 and 2017.

Click to view the homes that reflect the highest and lowest sold PSF for Mid-Year 2016 and 2017.

Click here for the SF homes with the highest sale price in the first six months of 2016 and 2017.

Please note:

  • Condo sales include coops
  • PSF is Price per Square Foot
  • Data includes CMLS recorded transactions only
  • The surrounding towns tend to follow similar market trends when compared to Stamford. For data on your specific town, please email your request to prattray@kw.com

March 2016 v. March 2017 Single Family and Condo Sales – Stamford, CT

Mar 2016 Mar 2017 Percentage Change
SF Total # Sold 52 62 +19%
SF Median Sold Price $475,000 $607,000 +28%
SF Median Sold PSF $330 $210 -36%
SF Newer Homes* # Sold 2 9 +350%
SF Newer Homes Median Sold Price $950,000 $1,050,524 +11%
SF Newer Homes Sold PSF $305 $199 -35%
CN Total # Sold 41 52 +27%
CN Median Sold Price $285,000 $290,000 +2%
CN Median Sold PSF $145 $242 +67%
CN Newer Homes* # Sold 8 11 +37%
CN Newer Homes Median Sold Price $510,000 $450,000 -12%
CN Newer Homes Sold PSF $258 $405 +57%

Observations:

The data was interesting in March. Buyers decided not to pay more per square foot for newer single family homes even though the median price was up. This is because buyers are beginning to think renovated is the new normal.  It is expected that even older homes are supposed to be renovated, energy efficient and have all the bells and whistles, so both an older updated home and a younger home can trade at a similar price. The median PSF for condos was higher than for Single Family Homes in March. This is rare and most likely due to the fact that condos with great floorplans are closing at a premium since they are often more convenient to town, trains and highways than many sold Single Family Homes. Convenience is something buyers are increasingly seeking. The sold price for 25 Sleepy Hollow (the reflection of the median for Single Family Homes) is similar to what a buyer would pay for new construction, but it was built in 1947. I predict flipping is a good plan for the future of Fairfield County as our inventory continues to age.

Click here to see homes that reflect the median price and median psf for Mar 2016 and 2017.

Please note:

*The 2016 data sample for this is too small to be meaningful

*”Newer Homes” refers to single family homes and condos built in 1990 or later

PSF is Price per Square Foot

Condo data does not include coops

“Newer Homes”data sets are subgroups of the total figures

Data includes CMLS recorded transactions only

Surrounding small towns tend to follow similar market trends when compared to Stamford. For data on your specific town, please email your request to prattray@kw.com

Feb 2016 v. Feb 2017 Single Family and Condo Sales – Stamford, CT

Feb 2016 Feb 2017 Percentage Change
SF Total # Sold 37 31 -16.2%
SF Median Sold Price $615,000 $602,500 -2%
SF Median Sold PSF $258 $231 -10.5%
SF Newer Homes* # Sold 7 3 -57%
SF Newer Homes Median Sold Price $852,250 $1,079,00 +26.6%
SF Newer Homes Sold PSF $284 $270 -5%
CN Total # Sold 26 30 +15.4%
CN Median Sold Price $314,000 $230,000 -26.8%
CN Median Sold PSF $304 $275 -9.5%
CN Newer Homes* # Sold 10 4 -60%
CN Newer Homes Median Sold Price $550,000 $429,500 -22%
CN Newer Homes Sold PSF $296 $322 +8.8%

Observations:

SF home sales in Stamford in February was sluggish compared to the prior year, most likely due to factors in the overall economy, business and political world more than anything else. Both demand (units sold) and PSF were down, although it is important to remember that demand can be artificially low when there is not enough desirable inventory to buy. This is often the case in Fairfield County this time of year and also as buyers get pickier and lean towards the exceptional properties only. Selective buyers are not only taking their time to buy, but they are generally more willing to wait until more inventory becomes available rather than bid the price up on a property they like that has buyer competition. This phenomena is what is keeping prices reasonable even though a large number of Fairfield County residents understand the advantage of buying versus renting. On the condo side, more units were sold at lower prices overall. Newer condos, however, experienced an increase in PSF’s even though the median purchase price was down. This means value is improving but budgets are not. Overall, the strong 15.4% increase in demand is refreshing. I predict demand will get stronger throughout the year as first-time buyers get weary of record high rents. Their only constraint will be inventory. I encourage current owners to study those terrific real estate design sites like Houzz and renovate with an eye for what younger buyers want. Failing to do so means your home will sit on the market and risk getting sale, only to trade painfully at fixer-upper pricing.

Click here to see homes that reflect the median price and median psf for Feb 2016 and 2017.

Please note:

*”Newer Homes” refers to single family homes and condos built in 1990 or later.

PSF is Price per Square Foot

Condo data does not include coops

“Newer Homes”data sets are subgroups of the total figures

Data includes CMLS recorded transactions only

Surrounding small towns tend to follow similar market trends when compared to Stamford. For data on your specific town, please email your request to prattray@kw.com

Jan 2016 v. Jan 2017 Single Family and Condo Sales – Stamford, CT

Jan 2016 Jan 2017 Percentage Change
SF Total # Sold 50 50 0%
SF Median Sold Price $518,000 $550,000 6.2%
SF Median Sold PSF $226 $262 +16%
SF Newer Homes* # Sold 3 7 +133%
SF Newer Homes Median Sold Price $900,000 $875,000 -2.8%
SF Newer Homes Sold PSF $225 $194 -14%
CN Total # Sold 33 39 18%
CN Median Sold Price $343,000 $245,000 -8.6%
CN Median Sold PSF $169 $144 -17%
CN Newer Homes* # Sold 10 10 0%
CN Newer Homes Median Sold Price $515,000 $432,500 -16%
CN Newer Homes Sold PSF $233 $266 +14%

Observations:

The median SF sold price was up in January of this year compared to last year. PSF was also up for SF homes, which indicates that demand continues to strengthen overall. However, when you look at newer homes that have been commanding a premium, the median price and the median PSF were slightly down, so buyers might be getting more cautious about paying more and more for newer SF homes. Due to sluggish condo demand (especially by entry-level buyers), the condo median price is down reflecting a decline in value for the older condos that make up most of the inventory. Newer condo PSF is up 14%, indicating a continued preference and willingness to pay more for newer condo construction. While more older condos were sold this January, the median price was still down 8.6% reflecting the financially conservative and analytical nature of current buyers. Note the flat numbers for total SF unit sales and newer condo unit sales. Don’t expect dramatic shifts in prices in these categories anytime soon if demand remains unchanged.

Click here to see homes that reflect the median price and median psf for Jan 2016 and 2017.

Please note:

*”Newer Homes” refers to single family homes and condos built in 1990 or later.

PSF is Price per Square Foot

Condo data does not include coops

“Newer Homes”data sets are subgroups of the total figures

Data includes CMLS recorded transactions only

Surrounding small towns tend to follow similar market trends when compared to Stamford. For data on your specific town, please email your request to prattray@kw.com

2016 v. 2015 Single Family and Condo Sales – Stamford, CT

2015 2016 Percentage Change
SF Total # Sold 740 715 -3.38%
SF Median Sold Price $574,350 $555,000 -3.37%
SF Median Sold PSF $262 $255 -2.52%
SF Newer Homes* # Sold 74 65 -12.16%
SF Newer Homes Median Sold Price $975,000 $875,000 -10.26%
SF Newer Homes Sold PSF $264 $277 4.81%
CN Total # Sold 509 613 20.43%
CN Median Sold Price $303,500 $317,000 4.45%
CN Median Sold PSF $249 $251 0.98%
CN Newer Homes* # Sold 125 163 30.40%
CN Newer Homes Median Sold Price $875,000 $490,000 -44.00%
CN Newer Homes Sold PSF $454 $305 -32.78%

Observations:

There was a significant increase in demand for condos in 2016 compared to 2015. There were 20% more buyers of condos overall, and 30% more buyers who bought newer condos (built in 1990 or later). Even though more buyers were willing to commit to a condo purchase, they refused to pay more per square foot compared to last year, and their budgets were lower.

Fewer buyers bought a single family home in 2016 compared to 2015. Accordingly, the median price and price per square foot slipped downward since these homes became more difficult to sell. Even though fewer newer homes sold in 2016, buyers were willing to pay almost 5% more per square foot to secure a newer single family home.

These numbers suggest that there is still strong demand for home ownership in Stamford. 715 single family units sold in one year reflects a healthy amount of activity historically. However, buyers are increasingly price conscious and they have high expectations for modern features and design. Prices will most likely remain affordable in the near-term due to this high level of discernment shown by local buyers. The lack of newer inventory will also continue to constrain demand.

Click here to see homes that reflect the median price and median psf for 2016.

Please note:
*”Newer Homes” refers to single family homes and condos built in 1990 or later.
Condo data does not include coops
“Newer Homes”data sets are subgroups of the total figures
Data includes CMLS recorded transactions only