What a Difference a Year Makes
About this time a year ago, I put together what is known as a Total Market Overview of home sales in Brownsburg. What this does is break down real estate activity across several price ranges. It’s an easy way for you to see how similarly-priced homes have been performing, while also summarizing the local market as a whole.
I’ve updated it, and WOW!
So how has the market changed in Brownsburg since last March?
Take a look at the 2 reports below. You can click on each image to enlarge. Let’s look at the bottom line on each. The number homes on the market and not under contract is nearly half of what it was just one year ago. More homes are under contract now, but the current totals are just 200 homes active or under contract versus 246 last March.
Fewer homes are expiring and more are selling. This has led to the absorption rate in nearly every price segment – which was already indicating a strong seller’s market, going down. Overall, it’s been reduced by one-third from last year. This is a ridiculously low number for our area. As a matter of fact, I haven’t seen this much lack of inventory in the fifteen years that I’ve been a REALTOR.
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You have a nearly TEN PERCENT INCREASE in average sale price from a year ago, and the negotiation “give” has dropped from 2.7% to 2.2%. This is seller’s market appreciation on steroids.
(click to enlarge images)
Bear in mind that this is a snapshot of last March and this March. The market will ebb and flow throughout the year. But given all of the other data I have seen and shared on this website, sellers will continue to hold the cards until something gives. And if Days on Market is able to tell us anything relevant, it might be telling us that we are at a tipping point as far as the current active inventory is concerned.
Fortunately. we are coming into the time of year traditionally when more homes hit the market. For those who are ready to sell, thinking about it or were unsuccessful in their effort to sell last year, this is the time when you can make the most out of it and net more than you could even just one year ago.
Where does your home fit in the 2017 chart? This might just be the Spring you’ve been waiting for. If you’d like to find out if now may be the right time for you to sell, call or text me at 317-207-1110 or click the blue Facebook Messenger icon to the right. Let’s figure it out together.
- Number of Homes For Sale (Active) – These are homes currently on the market here which have not receive an offer accepted by its seller.
- Number of Homes Under Contract or Pending Sale – These are homes that may or may not still be showing up on various property search sites. For example, on many sites, you might see homes with a status of “Active with Contingency.” This means that the sellers have accepted an offer on the house but the buyer must complete one or more steps in order to remove contingencies (like securing financing, getting beyond inspections, etc.) before the house will be shown as “Pending.” While active with contingency, a seller can elect to continue to advertise their home with the goal of securing backup offers. Once a home had pended, it is usually removed from marketing and no other offers will be considered. The property is in wait mode until the transaction closes.
- Expired Listings – These are properties that did not sell during their listing contract term.
- Months Needed to Clear Current Inventory – Also known as the absorption rate, this number is derived from a formula taking into account active, pending and sold properties over a given period (in this case, 6 months) of time. It tells you how long it would take for all homes to sell if no other homes came onto the market. This number is probably the single most important one in determining whether an area or segment of an area is experiencing a buyer’s market, a seller’s market, or a balanced market. Generally speaking, 5-7 months is considered a balanced market, over 7 months is a buyer’s market and under 5 months is a seller’s market. This market pendulum swings over time. Locally, we have been in a seller’s market for a few years now.
- Original List Price vs. Final List Price – Many homes experience one or more changes in price during a marketing term. A home might not see increased activity or offers until price has been adjusted to the point that buyers become interested.
- Average Negotiation Final List to Sold Price – Properties sell when price and interest intersect to a degree that offers come in. From there, negotiations begin which can include anything related to the property, including its price. This is the average amount of “give” seen between the list price that induced an offer, and its ultimate sale price. In a seller’s market, there is typically less “give.”
- Average Days on Market – This is what I consider a “surface stat.” It is useful for general comparison, but is not as meaningful as the absorption rate because this stat does not take into account the fact that many listings are removed from the market and sometimes immediately re-listed. For example, a home may currently be on the market for 30 days, but it is possible that the same home expired six weeks earlier after being on the market for six months.