The discount to market is affected by the property’s physical condition. The unweighted average price discount for the period January-December 2012 is about 15 percent for houses in above average condition and about 35 percent for those in the poorest condition.
What this means for REALTORS®: Keep emphasizing the value of good home maintenance to build up home equity and maximize price.
Tight inventory and multibidding have led to shorter days on the market. Based on information gathered from the December 2012 REALTORS® Confidence Index Survey, about 31 percent of REALTORS® who sold a home reported that the property sold in less than a month, compared to 22 percent last year. About 57 percent were sold within 3 months, compared to 47 percent last year. The median days on the market was 73 days.
The homeownership rate fell again in the third quarter of 2012. The latest 65.3 percent ownership rate (seasonally adjusted figures) is the lowest since 1996, when Bill Clinton was campaigning for his re-election. But there is good news in the data as related to ownership. The number of homeowners grew for the second consecutive quarter (see graph below). The number of renters also increased, attesting to continuing solid rental housing demand. Both owner and renter population can rise at the same time (and not be a trade-off) when household formation grows.
Demand continued to expand faster than supply. The Buyer Traffic Index rose to 56 from 36 in the same period last year, while the Seller Traffic Index barely moved, ending at 38 from 37 last year. REALTORS® reported numerous cases of multibidding resulting in “properties selling above the list/asking price” or “distressed sales selling close to market price.” The market has steadily moved towards a seller’s market with buyers more willing to bear closing costs, in some cases “paying for half or more of the closing cost.”
What this means for REALTORS®: The tight inventory of homes for sale has strengthened prices, with 79 percent of REALTORS® reporting constant or increasing prices compared to the same time a year ago, and 87 percent of REALTORS® expecting constant or rising prices in the next 12 months.