I got a little suspicous when I first posted this Altos chart showing the Market Action Index (less than 30 suggests a buyer’s market, duh) and weekly absorption (homes opening escrow) for Scripps Ranch. Specifically, this data shows Scripps Ranch detached homes going into escrow at a clip of approximately 8 to 10 per week, yet I know that we aren’t closing 40 homes a month.
My own experience tells me why we are seeing a discrepancy; more homes are failing to close once under contract or, as we more commonly say, falling out of escrow.
This morning I took a quick peek into the statistics, courtesy of the Sandicor Multiple Listing Service. I looked at both homes which successfully recorded in July and homes currently in escrow to see how many of these had experienced previous failed attempts.
On the one hand, I expected the data to be worse (more “fallout”). On the other hand, if you have found yourself in that smaller slice of the pie, it’s pretty bad. And, from purely the agent’s perspective, you can imagine how much we love doing everything twice. Again based on my experience, this is partially due to buyer cold feet in an uncertain market but mostly due to the difficulty in obtaining financing in a market where the rules of underwriting are changing as often as a new mother of twins. In recent times, up until about a year ago, failed sales were quite the unexpectedly anomaly. Today, it is important to remember that your home is not truly sold until the Fat Lady gets her County tax stamp.