It’s Not a Market Until Something Sells

It’s Not a Market Until Something Sells

Continuing the conversation… After a recent column about the changing market,  a reader was kind enough to share a phrase he’d learned in the wholesale produce business:  “It’s not a market until something sells.”    That’s a brilliant observation and one that offers helpful insight into the vagaries of our current marketplace.

Here’s what I mean: While it’s clear that a shift is occurring,  it’s also true (albeit a little confusing) that SOME properties are still selling very quickly and for full price. Each of those sales is a kind of meme for the crazy market of three years ago, when just about EVERYTHING was flying off the shelf.  It only takes a few of them to stoke seller hopes and encourage more aspirational pricing. 

We should also clarify that those SOME properties that are still selling,  aren’t selling quite as fast as they were in 2022 and there are notably fewer of them selling.  And there aren’t anywhere near the same number of multiple-offers competing for them or the same number of bidding wars driving prices up 20-30% above list.

Here’s what’s also true and most important about our current market: There are MANY more properties that are not selling. Significantly more than most agents can remember, since active supply is now sitting higher than at any time since 2013. 

Those MANY properties that are not selling are sitting on the market while their days on market (DOM)  keep adding up.  More DOMs means buyers have more choices and more leverage, which is also why we are seeing a lot more price reductions, more escrows falling through and more properties selling for less than they were listed for. 

So here’s the big disconnect in all of this:  Why are median and average prices still so high?  If the market is changing so dramatically, why are they still hovering in the same narrow range they’ve been in for the last three years,  just a tiny notch below the all-time highs they achieved back in 2022 when the market hit its peak?

Here’s the reason:  our current median and average price points reflect the selling prices of the SOME properties that are still selling quickly.  But they don’t reflect the MANY homes that are still sitting on the market, rather than selling. The sales prices for those MANY homes won’t be factored into the data until they actually do sell.

And thus, we’ve come full circle back to the original point my reader shared:  “It’s not a market until something sells.”  Looking ahead, what will the average and median price points be when all those unsold listings finally sell?