Wow.

That’s half as many as August (which was a pitiable month for sales in general), and about 1/4 as were sold in each of May/June/July.

Methinks that a lot of those expired listings came from the north end of town…

It’s an interesting and unfortunate phenomenon. You’re right, lots of these sellers will still make decent equity if they bought in 2+ years ago. A tough lesson for those chasing the softening market.

Norm,

I think many clients rely on you as a realtor to give them a fair price estimate. Yourself being a reasonable individual tells them they need to have a competitive price on their house or they won’t likely sell it. People selling their own properties are going to most likely be the chasers. I’m sure too there are always some stubborn ones who insist their property is still worth what it was “6 months ago”.

SomethingDoesntAddUp,

It does seem like a strange time to be making one of the biggest decisions of your life…

A massive drop in commodity prices, slow down in exports due to recession/depression, freezing of credit markets, all of this will be extremely destructive for the local economy. All of the factors that causes the local boom are being reversed. Anybody who seriously needs to sell their house, you need not take my word for but I strongly recommend you look at the link George provided and in general educate yourself on what is happening in the world right now. This doesn’t look at all like a short-term event but rather may preceed the next depression. It may sound like an overreaction on my part but the fact of the matter is, the level of government intervention right now has not happened since the great depression. In fact, based on the levels of debt currently held by western countries we are headed into this in even worse shape than in 1929.

http://fresh.bnn.ca/reuters_story.aspx?story=2008-10-11T210834Z_01_TRE49A36O_RTROPTT_0_CBUSINESS-US-FINANCIAL3.XML

What the heck was last week then?

“Norm – In your sales experience have you seen clients with this mindset??”

Absolutely, and the article that you’ve read accurately outlines the cost of “chasing the market down.” If you doddle at the wrong price for thirty days, you’ve cost yourself some cash.

Example: $300,000 is a price at which the home is marketable. Seller opts to price the house at $325,000 reasoning, “we can always come down.” Nobody bites in the first thirty days. The right price is now $280,000 and the seller reduces to $300,000 about thirty days too late.

I’m looking at a house that was originally listing in May for $479,900. It has been cancelled and re-listed five times since then, most recenlty at $399,900. My sense is that they are finally priced right and the house looks attractive at this price. Had it been listed at $439,900 in May, it probably would have found an eager buyer, perhaps even an overbid.

That said, I have to say that many sellers have shown that they get it. That’s why we’re still managing to sell 200+ properties each month.

Crikey,

Thanks. I’m feeling like I have something going here for this particular report.

I was just finishing up a sales to listing graph when you asked the question and it has been added to the post. You may need to refresh your browser to see it. I’ll include an updated version of each graph every month.

Thanks for the feedback.

Love the graphs. Do you think you could run listings vs. sales over the same time period every one in awhile? Every 3 to 6 months?

“This is just the beginning. There is always a LOT of resistance from sellers to lower their price when they think of what they “could” have gotten for their property 6 months ago.”

I read an article about this price resistance mindset a while ago. The author postulated that homeowners watch house sales in their neighbourhood and mentally lock-in the increase as “profit” during rising markets. When it comes time to sell if the market value of their home has dropped from the last lock-in they view the difference as a “loss”. This is in spite of the fact that they may have bought the property years ago and are realizing a large capital gain when they sell. This emotional reaction may end up costing the homeowner a considerable amount of money because they start reducing the price too late and end up chasing the market down.

Norm – In your sales experience have you seen clients with this mindset??

Thank you for the suggestions. I’ve added the three month rolling average to the graphs, and you’re right, it does add something pretty interesting.

I do plan to update the graphs each month and include them with this particular report.

Thank you again.

Shane,

This is just the beginning. There is always a LOT of resistance from sellers to lower their price when they think of what they “could” have gotten for their property 6 months ago. The only thing that would stop prices from dropping further is for inventory to get eaten up. Until that happens it’s a buyer’s market, and when it’s a buyer’s market prices need to be competitive if you want to sell.

Those are great graphs. Thanks for taking the time to put them together. I hope that you can post the revised version every month. A few comments:

- The average price will have a lot more monthly variability than the average due to high end sales. Therefore it is not very useful for trend analysis.

- The median price is a reasonable substitute for a Housing Price Index. You can see that the trend is down for houses in Saskatoon.

- If you plot a 3 month rolling average you will smooth out the monthly variability and can clearly see trends. Click my name to see some graphs for Victoria using this method.

It is a shame that these types of graphs are not published in the press and by the real estate board. It really lets buyers and sellers easily see market conditions.

Shane,

in any normal market prices do not stabilize when sales decrease and listings increase. Prices go down. With tonnes of condos coming onto the market within the next year( housing starts for multi units are still very high) prices will come down.

I wrote in the last post why prices will not go up but down and this is not even factoring the world wide credit crisis.

For anybody being on the sidelines I would wait until at least spring. Prices will have come down quit a bit and hopefully this credit crap is over with or at least we will know what the carnage is by then. I would be scared of adding debt for the next few months.

I don’t know. Condos certainly aren’t up much year-over-year. As we head into winter I think we can expect the see demand drop some as we usually do. Inventory remains pretty high at close to 1,700 units so it seems reasonable that prices could continue to slide some.

One of the agents in my office is looking for a new house and he is starting to shop right now. I suggested that December might be a better time. Most sellers won’t be getting much action at that time and the thought of a pre-Christmas sale might really have them feeling motivated. That said, there probably are some sellers out there who are willing to sell at a decent price right now. Really depends on where you see things heading.

Despite the decrease in sales and increase in listings, it really does look like prices have stabilized rather than dropping much, especially in the condo market. Time to get off the sidelines and buy, perhaps?