Dropouts

Posted by Dave Fratello on Thursday, September 13th, 2007 at 2:00pm.

In a slowing market, one thing we're likely to see is fewer "discretionary" sellers – folks who will sell if they can get their price, but otherwise won't.

We have our share of toe-dippers and partway-serious sellers in MB, though you can never be sure of a seller's motivations unless you're the listing agent. Last week, the chief economist of the state realtors' association said:
The best thing you as a real estate professional can do in this market is to encourage sellers who are not serious about selling their homes not to list. Don't take a listing from someone on a hope.
One way to gauge the number of non-serious sellers is to watch cancellations. Three out of four times, a cancellation is followed almost immediately by a bogus re-list to reset the DOM clock. (For instance, we've seen 7 cancellations in September – 5 quickly re-listed.) Here are the numbers of actual cancellations, minus bogus re-lists, in recent months (SFRs, west of Sepulveda):
April: 3
May: 5
June: 3
July: 5
August: 7
Sept (->12th): 2
Among the more recent cancellations, 2622 Pacific stood out as a case of a seller that likely wanted a given price (started at $1.699m, quite high, and slowly dropped to $1.599m) but wouldn't adjust and decided not to sell when neighboring sales came in lower. They weren't toe-dippers, per se, but they overpriced at first and weren't going to play pricing limbo after.

In the Hill Section, 873 8th began in March at $2.999m, and never budged. They canceled this week with just less than six months' market exposure.

In the Sand, the two interesting examples were 232 16th ("234 16th"), which rented out rather than sell below their $4.5m list price, and 209 19th, which popped on and off the market this summer at $3.85-$3.95m but dropped out in August.

Of course, any of the new cancellations could come back, which is why we keep them in our database, but those listed above did not yet re-list.

This is no tidal wave, not hardly, but we'll watch cancellations as an indicator and keep you up to date.
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