Properties for Sale: What Are They Like?
Raise the Roof: A Look at Homebuyers and Properties
Property characteristics
In the previous article, we discussed the characteristics of homebuyers in the market. In this series, we’ll discuss the characteristics of properties that are available for sale.
Properties in the market
The National Association of Realtors’ data showed that, on average, properties stayed on the market for 58 days before they were sold to buyers. This is lower than the average 66 days required to sell a property in December 2014. The longer average duration of a property staying on the market indicates that properties are not being sold easily and that there are challenges that need to be overcome in order to dispose of them.
Short sales took the longest time to get rid of, as they were on the market for an average of 86 days in December. Foreclosures were relatively easy to sell, staying on the market for an average of 68 days. Non-distressed homes took the least time, 57 days on average, before they were sold. Around 32% of homes sold in December were on the market for less than a month.
Sales by price range
Most home sales were in the $100,000–250,000 price range, with 43% of buyers falling under this segment in December. Most homebuilders cater to this segment. D.R. Horton’s (DHI) Express Homes have an average selling price of $199,000, while TRI Pointe Group (TPH), Taylor Morrison (TMHC), and Meritage Homes (MTH) are intensifying their offerings in this segment. The iShares US Home Construction ETF (ITB) invests ~12.2% of its portfolio in D.R. Horton and 10.6% in Lennar (LEN).
Sales within the $250,000–500,000 price range followed next, making up 31% of the total buyers in December. The very low-cost segment for homes costing less than $100,000 comprised 14% of total buyers, while 8% of buyers made purchases in the $500,000–750,000 segment in December.
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