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Price it right and reduce selling time by 79 days

CDOM tells the true story

For regular followers of this website, you will know that we can now do a new calculation/stat entiltled "Cumulative Days on the Market"(CDOM). It's been a contention, rightly so, that DOM was not an accurate reflection of the true days on the market.

CDOM includes the days in which a listing was previously on the market under a different MLS number.

For Friday March 27, there were 91 sales including condos and single family homes. 37 of those sales did not have a price reduction and sold in an average CDOM of 29 days.

The other 54 listings all had at least one price reduction(some as many as 8), and sold in an average CDOM of 108. If you're looking for a reasonably quick sale, this exemplifies the importance of pricing your property correctly the first time.

If you don't count any of the re-lists, for all 91 listings, the "old" DOM was 51.

The average property with a price reduction will spend 272% more time on the market.

High praise, kudos, and accolades to CREB for responding to the need for this data. If you don't see many realtors using it, it's because you have to export the data and do the calculations on Excel.

Posted: Sunday, March 29, 2009 10:36 AM by Bob Truman

Comments

Bob Truman said:

The evolution of real estate statistics

Better information results in better decision making for the home buyer or seller. At DailyStats.ca this is the beginning of our fourth year of providing up-to-date, relevant and unique statistics on the Calgary real estate market. I remember when I started doing this, the prominent number being tossed around was always the average price of combined single family homes(SFH) and condos. That now seems like ancient history.

Although the media has yet to get on board, it is widely understood by stats afficionados that median price is much more meaningful than the average price. The average can really get skewed by a couple sales at the high end of the market.

Separating condos and SFH into separate categories was the best change. There is a wide divergence in the behavior of those two elements, and it made a lot of sense to look at them separately.

Taking out the surrounding towns and outlying districts from the stats was another positive move. If you're looking to buy a home in Calgary, what do you have in common with someone looking for a home in Beiseker or Canmore? It never fails to amuse me how this "Old Criteria" gets distorted and debauched by people with an agenda. The only place you can see a true comparison of today's inventory with the original CREB data is on my Old Criteria page.

A few years ago, it was unheard of to look at Sales Price/Sq Ft(SP/SF). While you have to be careful with this number because it is misleading to compare different styles of houses based on the SP/SF, for a large set of data it can be meaningful and show a trend. Just don't compare one bungalow with one 2-storey; those are two different animals.

Now, the latest, as I've mentioned in my blog post, is CDOM. The new numbers we have available to us can tell a seller what to truly expect when they list their home, and it should aid in pricing homes more accurately. Potential buyers can also see that a well-priced home sells in well under the average DOM, and they need to act expeditiously.

You may have noticed that we are now updating daily the SFH Monthly Summaries and the Condo monthly summaries pages. These are calculated using the numbers from the past 30 days. This allows a slightly different perspective on the numbers than you will see on my colleague Mike Fotiou's website, www.findcalgary.ca, where he gives you the month-to-date numbers.

# March 29, 2009 11:10 AM

kman said:

hi bob, i commend you on the outstanding job you do in providing as much info as you do. A couple of questions for you. first, in your opionion, has the market settled yet? And second, what is the reason for a lot of realtors and sellers not pricing properties a bit lower? why don't they give up on being hard headed and get realistic.

As I mentioned before, any predictions this year could be made by throwing darts. I tell my buyers to wait if their situation will allow it, but I'm starting to have second thoughts.  I mean who thought we'd see condo prices higher than they were in December? Condos, of all things, were supposed to be tanking by now. Nobody predicted the dramatic fall in inventory which is now down 24% compared to last year. New listings are down 43%.  Come summer/fall, I will look pretty stupid if the prices continued to go up and my buyers have less selection. 

As for pricing too high, sellers have different motivations. Not everyone NEEDS to sell, and those people are content to stay put if they don't get the price they want. For the most part I believe realtors are giving good advice about pricing, but you can only lead a horse to water. The seller ultimately decides what the asking price will be. -Bob

# March 29, 2009 10:32 PM

Rick.C said:

Hey Bob

Great way of looking at the stats, this will allow people to make the right pricing desicions. These stats really puts things in perspective. To be honest I always though thats how the stat was but I guess I didnt realize price reductions affects that. I just wanted to ask how you got your Condo inventory number. From what I see last Feb 2008 there was 2301, this year in feb there is 2065 properties. That to me means there is only a 11% drop dividing 2065/2301= .89 = 11% or you could add them up 2065+2301=4366 then 2065/4366=48% for this year and last year = 52%. That would mean there is only a 2% drop. How is that you get 24% I'm curious to know. Please fill me in?

That was ambiguous on my part.  I was talking about condos in one breath, and single family homes in the next, so I understand why you may have thought I was referring to condo inventory. Unless I specify condos, my "default" property class is always single family homes.

Single family home inventory on March 31, 2008 was 5957. Today it is 4545. That's a 24% drop. With expiries at the end of the month, I don't expect it will change much.

Condo inventory in March is down 22% compared to last year.

Condo inventory in Feb was down (236/2301) = 10.3% 

Condo statistics

-Bob

# March 30, 2009 10:09 AM

dvrvd said:

I have to say, I am actually surprised that inventory hasn't spiked (yet). I tended to agree with bears like Worldclass who felt we were going to see a tsunami of new listings. I am guessing that the "specuvestors" aren't nearly as desperate as one might have thought they'd be. Everyone into the rental pool!

Anyway, I would still advise buyers to wait until summer/fall to see how things play out. Even if prices don't drop much more, I just can't see any sustained uptick at this point considering the state of the economy.

# March 30, 2009 12:46 PM
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