Pending Ratios

As I’ve discussed before, pending ratios are a good way to look at how “hot” a particular real estate market is and to compare it to other markets or the same market at a different time.
I noticed today we have 83 active listings for single family homes in the Leavenworth area. This is certainly a lot more than the 40 some we had for most of the Spring. But are houses selling? I’ve been staying busy with lots of sales, but that’s not a good barometer for the market as a whole.
As they say on NPRs Market Place… Let’s look at today’s numbers:
There are 20 homes under contract out of the total of 103 homes. At 19% pending ratio this is clearly a “buyers market”. Tell that to the buyers out there. Prices are increasing and the inventory seems lacking.
Here’s why:
Homes under $200,000
This is the hot ticket item. We know this anecdotally and the numbers show it too. 5 out of 7 homes are pending for a ratio of 71%. A seller’s market under $200,000.
$200-300,000
This is a typical vacation or second home buyer. 5 of 24 homes are pending. At 21% this should be a buyer’s market. Of course there are only 19 homes to choose from and most of them aren’t great. I think it’s a buyer’s market in town and seller’s market out of town. The lesson here? Pricing does matter and product does too. Seller’s need to work harder to get their homes in marketable shape.
$300-400,000 5 homes out of 20 pending. 25% pending ratio. Really the same story as above.
$400-500,000. 7%
$500-600,000 20%
$600-700,000 14%
$700,000+ 13%
Still looks like a buyer’s market to me over $300,000. The inventory is low, but it’s double what it was this spring. Seller’s (and their agents) have just been too optimistic in their pricing.
Is the bubble bursting? No. Are these numbers drastically different than earlier this year? Not really. Mostly what I see is folks trying to cash in on the real estate jackpot. Their own greed is keeping them from seeing any real gains. The market (buyers) set prices- not agents, not sellers and not appraisers.