Sellers, and their listing agents, have been manufacturing the double-dip experience.
Because the local real estate market had the illusion of being “healthier”, they figured it was time to push their list price to see what the market would bear. A few got lucky and sold too, but the backlog has been building all year, especially on the higher-end.
Buyers are paying close attention though, and you can see it in the trends below on the housingtracker.net graphs. Look at the last year, the only part that might matter to buyers.
Let’s be specific too – in the upper tier the graph shows that the median asking price was going down dramatically the second half of 2009, which could indicate that prices were actually going down, or that the mix of active listings was adjusting. A review of the mix didn’t show any remarkable differences, so most of the decline must have been due to actual price reductions:
Look what’s happened since February, when sellers started getting (overly) confident again. The collusion of higher pricing didn’t impress the buyers, and inventory has increased 30% since January, meaning that the number of wrongly-priced homes is rising:
Once the sellers (and their listing agents) who want/need to sell, begin to run out of hope and start lowering their price, it’s going to look and feel like the double dip.
A second note: The inventory between May, 2009 and January, 2010 was practically flatlined, in a tight range of 11,500 to 12,013. With list pricing adjusting steadily downward in the upper tier, we had fairly stable market, with listings exiting the system at an almost identical pace as they were coming on. A good indicator to watch for the trend of pricing accuracy.