By Chad & Sara Huebener
For our West Savage neighborhoods, pending sales are holding steady, while sold (closed) listings in the past 45 days have decreased. There is no need for alarm, however. Pending sales are the noteworthy component here. Many closings (for these pending transactions) are projected further into the future, as opposed to happening in just a few weeks like we used to see in the past.
A couple of things are going on here..... First of all, lender requirements have tightened, so buyers need to jump through more hoops to get qualified, and must allow more time for scheduled closings. Secondly, transactions involving bank-owned homes and short sales are more difficult to coordinate. Banks do not respond nearly as quickly to offers and negotiations as a traditional seller would, and consequently, we are counseling buyers to expect delays and lengthy waiting times before writing the offer. This is especially true of short sale transactions.
Inventory and expired listings continue to rise in West Savage, though ever-so-slightly. Expired listings are an indicator that buyers are not willing to pay the stated list price of the home. West Savage home prices are down an average of 20% per year over the past two years. This message is exceptionally difficult to convey to a seller who bought during the boom and added significant upgrades to the home since the purchase, and now needs to sell. In many cases, the value of those upgrades (in the monetary sense) is simply lost. However, these upgrades might make a property much more attractive compared to the competition. When an average of 3 homes in our West Savage marketplace sell each month, the ability to stand out among the competition is critical.
Our West Savage absorption rate has increased to 11.5 months. This means that if zero new homes come on the market, it will take 11.5 months to sell the existing inventory.
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