Record-low inventory levels are breathing new life into homes that were withdrawn from the market but now are finding buyers in markets across the country.
Relisted properties make up a large part of her business, reported Denver Realtor Lydia Lin of One Realty at the National Association of Real Estate Editors conference last week. Reports around the country indicate that the inventory drought is reducing the number of expired listings and encouraging owners who took their homes off the market to relist them for sale.
On the national level, the inventory of single family homes, condominiums, townhouses and co-ops for-sale was 20.07 percent lower last month than it was in May 2011 and declined in all but two of the 146 markets covered by Realtor.com. Since the beginning of the year, the total size of the inventory has averaged about 1.8 to 1.9 million units, the lowest levels observed since Realtor.com began collecting these data in January 2007.
Though no one keeps national data on expired listings and relistings on a national level, market reports from brokers and MLSs around the nation confirm that the environment has improved this year for relisted properties that failed to sell the first time around.
Many agents take a listing for 90 days, when the listing expires. Most MLSs require that expired listings stay off the market for at least 90 days to discourage the practice of relisting slow selling properties to “freshen” them and hide their actual accumulated days on market from buyers. However, in today’s market, fewer properties are expiring and many of those than do are finding buyers when they come back on market. After a home is on the market for 60 to 90 days, it is not unusual for it to sell within five days after coming back on the market as a new listing.
Tallahassee Realtor Joe Manausa calls unsold, expired listings the “forgotten” real estate inventory because the vast majority, as many as 80 percent, will return to the market when flaws that kept them from selling are corrected or the market improves.
“It is the growing group of homeowners who have given up hope of selling their home, but they still want to move. Many of the homes that failed to sell simply re-entered the MLS after failing (sometimes more than once) and eventually sold, but you might be surprised at the number of failures that still remain in the forgotten real estate inventory,” he wrote in the Active Rain site.
The Forgotten Inventory appears to be on the decline in many areas. In Atlanta, where listings are down 33 percent on the year, one broker offered 25 IPads last spring to agents who brought expired listings from competitors. “Think about this… every single listing is now TWICE as prominent and important as it would have been back in the day of 100,000 available listings. Each listing today is worth 2 listings two years ago,” said Metro Broker’s Ann Bone.
In Williamsburg, VA expired listings are down 21 percent from a year ago . In Oakland, they were down 34 percent in May from 2011. In the South Bay area, expired listings peaked at the end of the year. In Austin, one of the hottest markets in the country, the ratio of sold to not sold homes on the MLS was 26 percent in the month of March. Even in good, solid seller’s market about one-third of homes that fail to sell for various reasons.