Is it persistence or stubbornness?

I track the local market that I sell into on a weekly basis and update various statistics about that market on a couple of my Web sites – http://www.themilfordteam.com/ and http://www.movetomilford.com/. One of the charts that I update every week is the Day-on-market (DOM) chart, which shows the average number of days that homes have been on the market within the townships that I cover, as well as the number of homes currently for sale in each price band. The chart is divided into $100,000 price bands, starting in a band from $20-200K (OK, that band is wider than $100K) and ending in a band for homes over $500K (another wider than $100K band).

What this can tell the reader is where to look for homes in a certain price band – a township with 50-100 homes on the market is a better place to look than one with 5-10 homes in that band. It also shows markets that are very slow or where homes have been on the market for a long average time, which may indicate more willingness to bargain. Of course, it might also just indicate a market where the sellers are stubbornly refusing to adjust their pricing to the prevailing market conditions.

The Milford market in the 400-500K and 500K and above price bands may be such a market. In those bands the average DOM is above a year. In the $400-500K band there are 7 homes that have been on the market for over two years and 7 more that have been for sale for over 3 years. And in the $500K and above band, there are 21 homes with over a year on the market and 13 more with over 2 years. Is that perseverance, which I always advise sellers that they need, or just stubbornness? Maybe it’s a bit of both.

The market for homes in those price ranges has been moribund for at least 2 years now; however, many sellers in that range have also been very difficult to convince that they can no longer get the premium prices that their homes brought 3-4 years ago. Generally these are homes owned by folks who can also afford to “wait out the market” or at least they think so. Interestingly about a third of the sales that have occurred in these price bands over the last year have been foreclosed homes.

One of the things that I can’t track is sort of like the hidden unemployment statistic about how many people just dropped out of the job market. In this case, it is hard to tell how many would be sellers in this price band have dropped out of the market. I know a few that have decided not to get in, once I had advised them what they would likely have to price their homes at in order to sell them in this market.

It’s a shame, really that some many people find themselves trapped in homes that they can’t sell, their plans for retirement or a job move or other life changes stymied by thei inability to sell the homes that they now have. That phenomenon is certainly not restricted to the upper price bands. About the only band selling briskly these days is the under $100K band and that is almost 100% foreclosure homes. So, maybe it’s not stubbornness; maybe it’s just the numb reality of this market.