Why Your Home Isn't Selling in Today's Market
Lately, I have been hearing people say that the market is bad and prices are going to drop. I typically hear this from buyers, probably hoping that the interest rates post covid and deals precovid will come back. Sometimes someone will just ask me out of curiosity and occasionally it is a seller wondering how this affects them selling their house and the value they will get.
Misunderstanding the Shift from a Hot to a Stable Market
People are asking the wrong question. They are assuming that the market is bad because homes aren't getting 25 offers in 25 minutes. They aren’t processing why houses aren’t selling as fast. They're also assuming that there are two markets here. A hot market and a crashing market, possibly because they experienced both in a short amount of time previously. The hot market prior to the crash of 08-09, followed by another super crazy hot market ten years later.
Not All Markets are Booming (Or Crashing)
There are other types of markets too. Seller or buyer markets exist that are not as blazingly hot as what we have seen. There are also stable markets that lean more neutral creating a relatively equal amount of pendings and new listings rather than the seller or buyer clearly being a “winner.” The problem is that when people, whether seller or buyer, don’t make the adjustment in their own decisions as the market shifts, listings don’t sell or sit longer. Today we’re talking about why listings don’t sell quickly or sell at all.
Houses Are Selling - Just Not All of Them
Everyday on the MLS, I see homes that have been on the market more than six months. But also everyday, I see homes under contract in less than 7 days. This would indicate that while some homes sit for quite awhile, other homes are still selling pretty quick. So why are houses sitting on the market and not selling? Three reasons: location, house and price.
Location Still Reigns Supreme
What Buyers Think About When They Hear "Bad Location"
The phrase “location, location, location” is 100% accurate. Your location will make or break the house sale in terms of days on the market and how much money it will sell for. This is true even in a hot market. Homes in less than ideal locations will typically take longer to sell. Especially in a market flooded with homes.
Some common examples of locations that make a home not quite as appealing would be homes by train tracks, commercial areas, busy streets or interstates, homes by airports or in a flight path. However, there are a few random things regarding location that are more buyer specific. Some of these reasons may surprise you. Sometimes people will say they don’t want to be on a golf course (no privacy), an HOA is a deal breaker (they don’t want someone “telling them what to do”) they don't want to live in the city, or they’re like me with zero desire to live in the country (too many wild animals). Sometimes other things get in the way of making a house their dream home.
Rea-World Example of Location Killing a Sale
Here is an example. My Uncle passed away and my aunt needed to sell his home. The home was newer and in a nice community so her assumption was that it would sell quickly. She put it on the market but the buyers were not interested. Their feedback was the same- no interest due to high tension wires in the back of the property. This had never bothered my uncle and he loved his home. But it made his buyers nervous. She tried to sell the home for a year before renting it for a year, and then putting it back on the market for another year before finally selling it.
Buyers may have different ideas about what an undesirable location means to them but at the end of the day, just know that location matters.
The House Itself May Be the Problem
Layouts, Smells, and Strange Features That Make Buyers Walk Away
My grandpa had a policy when buying homes. Never buy a two bedroom because most people want a three. For the area he was living in, this was accurate. Sometimes a house has a great location but something about the house will keep it from selling. For my grandpa, a two bedroom would be a big no. But let’s look at some other examples that could, much more generally, show why a house might not sell.
A traumatic event happening in the house will scare some, but not all, buyers away. This can potentially limit the buyer pool and may take the home longer to sell. I’ve had buyers on both sides of this thought process. Some considered it a deal breaker and some did not. The most frequent events here are suicides or murders on the property, and in particular, inside the home.
A house that smells terrible will not sell as well. This can be everything from cigarettes and trash to pets and essential oils. Yep, that’s correct. I have a client who hates the smell of oils and rules out every house that uses them. Obviously not all buyers feel this way about oils but all are turned off to some degree by what they perceive to be smelly homes. This can include the idea of potential smells. I sold a house where they were using their back yard as a dumpster, throwing trash bags over the back porch long enough that rats were coming and another house that used their 3rd bedroom as a dumpster. The trash bags were piled high with kitchen trash. Yes, it smelled awful. Other smells buyers have told me bother them include pig and chicken farms and beer factores (they smell like yeast). Be aware of that. Then you aren’t upset if buyer feedback says, “Not interested due to the smell of the home.”
Outdated Doesn't Always Mean Unsellable - But It Does Mean Slower
Floor plans that are not functional are a big deterrent to people buying a home. Even in a hot market, these will sell in either a longer time frame or for less money. This would include a home with walk-through bedrooms like an older century home might have, shared driveway (obviously not part of the house but part of the property), or in the case of a condominium, laundry not within the condo. Again, this doesn’t mean that the home won't sell, and there are always exceptions to every situation. It just means all other things being equal and given other homes to choose from, these homes typically don’t sell as easily and are on the market longer. The look of the home is another factor in affecting the time on market and chances of selling. As we all probably know, an outdated home will often sit on the market longer than one with more updates. That is part of the reason that “flipped” houses often, but not always, sell quickly and for a higher price than others in the area. If an outdated home is priced right, they will still sell. But when priced like a magazine home, they will not.
Price is the One Thing You CAN Control
2022 Pricing in 2025 Will Keep Your Home Unsold
A home priced too high will not sell and we are seeing that now. A lot of homes that I see sitting there for more than six months (and I’ve seen them listed over a year) are priced as if it is 2022. Well friends, it is not. Homes priced like it is still 2022 just sit - and here's what happens when you price too high. A house sitting on the market forever because it is priced like we are still in a super hot market does not mean the market is bad. It simply means the days on market will either keep climbing until the house is eventually reduced to the right price point or it will be taken off the market as an expired listing because it is not selling. So if you are listing your home, make sure that your agent is giving you up to date comps reflecting the actual market for today. If they aren’t then find another agent.
Don't Be the Nicest House in the Wrong Neighborhood
Here is something else that I see pretty regularly. There is a relatively common phrase that says “You don't want to buy the nicest house in the neighborhood.” When you do that, you really can't go up in value outside of inflation because you have purchased the nicest home with the highest property value in the neighborhood.
The best way to make money on a home is to buy the worst house on the street and then make it look like the nicest but still like it belongs. That is what most people flipping homes do and is also a great way for owner occupied people to build equity in a short amount of time. Think of a 5 year type plan. The problem is when people buy or build the nicest house in the neighborhood and then price it like it is part of a completely different neighborhood when time to sell. Let me give you an example.
I had a friend call me to get a price on a home she drove by just a few blocks from my neighborhood. This is an older neighborhood with the homes primarily built in the 50’s and 60’s. They are all unique in architecture but are mostly ranch homes similar in size-typically between 1400-1800 square feet. While she recognized that this house was newer and bigger than the rest, when I told her the price, she was shocked. Our neighborhood is great! We are walkable to the beach. It is a great place to live. A nice neighborhood but not a $1million + neighborhood.
Every few blocks, however, you will have that stand out house. It was either built on a lot that had a home torn down prior or was such a major overhaul that it looks like a brand new home. To the owner, it should be priced like it belongs in a neighborhood of million dollar homes. To the buyers, it should not. So they don’t sell. There are currently three of these in our neighborhood. Two of them already expired once and relisted and the other one was withdrawn. From experience, my guess, which may be wrong, is that there were no showings.
These homes skew the data. It might look like the island market is slow or things aren’t selling for list price because homes not priced right will sit. And these homes, for the reasons mentioned above, do exactly that. They sit.
Nothing can be done about a home’s location and some things- like floor plan- can’t be fixed about an actual home itself. But price, that’s an easy one. If your home is priced based on recently sold comparables only, it will sell. That doesn't mean that it will sell in one day or with multiple offers. But it will sell. If you have any questions about your home, reach out. We are happy to help.
