I don’t think unmotivated sellers affect DOM to any significant degree. Here’s why….
I do know of instances where the sellers (often investors) float a for sale sign out there to see if anyone wants a bite. The price tag is usually too high to trigger an offer in a buyer’s market. They got used to doing this in the seller’s market, and they continue to do so, knowing that if it doesn’t sell, then it doesn’t sell. They are, in a real sense of the word, unmotivated. My computations only involve homes that actually sell, so a home that is completely unreasonable and goes off the market will have no effect.
However, in this market, there are many motivated sellers, and they have adjusted their prices downward, but their homes still aren’t selling. They aren’t asking an unreasonable amount for their homes, given the history of sales, and are often asking prices that were in place a year ago. But they aren’t even getting offers.
Motivation is a matter of perspective. No one wants to take a loss or feel that they should. I wouldn’t call someone who doesn’t want a loss “unmotivated.” They may be unrealistic or maybe even not so smart, but I’m not sure unmotivated is the word that comes to mind. It takes people time to come around to new market price points, whether buyers or sellers.
I get your point but it is impossible to assess a specific “value” to certain amentities or features. One mans ocean view may not be desirable to Stevie Wonder especially at a certain price. When assessing a market as large as San Diego some generalities must come into play unless one wants to take their analysis to the neighborhood level.
As for my comment that “all properties in San diego will sell at some price in one day”, If all homes were priced at one dollar, they would all sell because I would buy all inventory today. Most properties in San Diego would probably sell for 250K within a short period of time. The key for each seller is to find that price point where they are maximizing a price that is acceptable to a buyer within the time frame that they want to sell. So price is the key assuming interest rates remain relatively stable. If interest rates move up or down significantly (or lender down payment reqs. or underwriting guidelines become more stringent) then prices must adjust accordingly. Therefore, properties that are priced correctly will sell. I hope that clarifies.
Sellers that sit on their usold property does not impact DOM data because the property is not sold. The average days on market relates only to properties that have sold.
To JH
Should have added this to previos post.
My definition of “priced properly” is the price that a buyer has agreed to pay. An asking price is just that. A hoped for price.
.
