Most of the real estate reports put out by the media focus on active listings (inventory) and sold listings (number of sales, median price, and days on market). Expired listings are another key part of the market that often get overlooked. You might be asking, so what is an expired listing, anyway? An expired listing represents a listing contract between a seller and real estate brokerage which does not result in a successful closing. In other words, a listing that runs its course and "expires" without selling.
More about expired listings
In a buyer's market, a large number of listings expire because there are more sellers than buyers. In a seller's market, a low number of listings expire, because there are more buyers than sellers. The 2 graphs below covering the Dane County real estate market show how expired listings have changed over the years.
For single family homes, a very low number of listings have expired each of the last three years. (Although not shown in the graph below, expired listings are beginning to rise in 2019, but not by a large amount). Compare this to the very large number of listings that expired from 2006 through 2011, when the economy shifted and the real estate market corrected.
The pattern for the Dane County condo market is very similar to the one above. (Note, condo listings are also beginning to expire more frequently in 2019, but not by an appreciable amount).
Another pattern worth noting is the seasonal aspect of expired listings. This graph for the single family home market shows most listings expire at the end of the year and very early in the year in the month of January.
The pattern for the condo market, once again, is very similar.
So what to do these expired listing trends mean for buyers and sellers?
Here are the 2 big takeaways: First, the low number of expired listings in the Madison area suggests we're still very much in a seller's market. However, during this holiday season, the market is more advantageous to buyers.
Right now, during the holidays, many sellers are lowering their expectations and becoming more flexible with their terms and pricing. During the holidays, many of these more motivated sellers are open to receiving any offer at all in order to avoid an expired listing and more time on the market. Although it goes against popular convention, this means right now is a great time for buyers to be out shopping for real estate. The prices are better, many sellers are more flexible, and there's much less competition during the holiday season.
Check out our Madison area real estate reports each month on our market updates blog. Our reports keep you up-to-date on the latest real estate trends in Dane County.
This article is published courtesy of: Dan Miller, REALTOR Mad City Dream Homes & RE/MAX Preferred