Madison Wisconsin Homes and Real Estate: Consumer Confidence

Wednesday, June 27, 2012

Consumer Confidence

TradingEconomics.com has this graph to show us where United States Consumers are with our confidence in economic things that matter. We know there are upward signs in the economic indicators and consumer sentiment made a nice rally from the slide that started last summer. Because I remember clearly how the real estate market slide in 2008 mirrored the mood into 2009 and again in the summer of 2011, it's worth paying attention today and watching through July. The fourth quarter of 2011 picked up in the last 2 months, but the summer and fall were uber quiet.

When sentiment draws back, home buyers hold tight. When buyers hold tight, competition diminishes. Without competition, offers made come with few seller-favorable terms. By terms I mean, price, closing date, inspections, appraisals, and acceptance of inspection related defects. Buyer's commitments to close become as certain as a giant Maybe. As in, if you agree to my terms, maybe I will buy your house.

Maybe if buyers understood that home seller's attitudes figure into consumer confidence they might not be so confidently cautious. People not confident as consumers are rarely whole heartedly committed sellers. Their maybe translates to: Maybe this isn't a good time to sell. The confident buyer can remain a buyer for a long time if unconfident sellers leave the market and leave too few good houses to consider.

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If Not Sold in the First 30 Days, Successful Sellers Conceded The Price

Through Mid-September, thirty seven percent (37%) of 126 home owners who sold in 2010 sold without making a single price concession. They typically attracted a buyer within 40 days of going on to the market. These successful owners conceded little on price as they sold for about 97%-98% of asking price.

Those who counted time on the market by months or even quarters eventually sold for an average of 91% of their initial asking price. Price reductions improved their success opportunity. Once their price was reduced to a price favorable to a buyer, the time on the market was short--about 34 days from last price change to accepted offer.

See September 20, Buyer Enticing Pricing

Disclosure

The source of data: South Central WI MLS Type of data: Single family homes and maybe condos and maybe other Areas: Madison and other areas such as McFarland, Shorewood Hills, Middleton, Maple Bluff, Oregon, DeForest, Cross Plains, Dane County, Fitchburg, Verona, did I say Middleton? Dates covered in these blog posts: January 2010 and continuing.

All comments are the relatively well thought out opinions of Tom Meyer. Those opinions are not necessarily shared by Restaino & Associates, other brokers, or the national, local, or state associations of Realtors... in fact, they may be significantly different.