Prices for homes listed for sale fell in 16 out of 20 markets that compose a new index. The Real-Time Housing Market Report says days on the market also increased in virtually all markets.
But are all markets languishing?
For-sale inventories actually declined over the past three months in most markets covered by the index, and some dramatically. That's good, but the days on market suggest it isn't happening very quickly.
While most housing analysts closely watch prices and inventory levels, days on market helps put it all in perspective. They show which direction a market is headed -- up or down. A buyer's market typically has over six months of inventory on hand, while a seller's market has under six months worth of homes for sale.
Homes in most markets took longer to sell. In Washington, DC, days on market increased 47 percent in the fourth quarter, 2007. It took 79 days to sell a home in October. In December, it took 116 days. That's a big change.
The days on market is a metric that's unique to the organized real estate industry. The number starts when a real estate agent puts the listing into the local MLS. It ends when the home is sold and closed.
Of course there are ways to manipulate the numbers. Some agents promote "pocket listings," which means they privately market the home to other agents and special buyers hoping to sell the home before it goes into the MLS. Some have been known to withdraw a listing that hasn't sold, reprice it, and enter it as a new listing, but most MLSs have rules against both practices because it doesn't give a true picture of the market to consumers.
Not all the news was grim. Some markets are signaling a turnaround. Take Dallas, for instance. Dallas was the only city to post a gain in list prices over the fourth quarter. Inventories are down 10 percent, over 8 percent took place in December.
Here's where days on market clarifies what's happening. Dallas days on market declined 11.5% over the quarter, with a whopping 16.7% decline in December.
That suggests demand is suddenly increasing in Dallas.
To see what market conditions are like in your area, go to RealtyTimes.com and click on Market Conditions.
