A recent analysis from Trulia has found that nationwide home sales have been failing at an increasing rate – with starter homes being at most risk. In the 4th quarter of 2016 alone failures were 4.3%. Furthermore, they report that on an annual basis the failure rate has nearly doubled to 3.9% in 2016, up from 2.1% in 2015. To determine this, Trulia took the daily status of all listings for the first two months of each quarter from Q4 2014 through Q4 2016 and then tagged any properties that went from “Pending,”or “Active Contingent” back to “For Sale,” or “For Sale by Owner.”
The reasons vary but here are a couple key findings:
- New homes and very old homes are least likely to see deals fail. As of Q4 2016, homes built in 2016 have among the lowest proportion of failed sales at 2.6%. That proportion increases steadily as age increases to an average of 5.2% in homes built from 1959 through 1969, then falls steadily to an average of 3.5% for homes built from 1900 through 1920.
- Of all listings in the largest 100 metros, 7.1% of starter home listings failed in the most recent quarter, compared with 6.7% of trade-up homes and 3.8% of premium homes. For all of 2016, the failure rate was 6.3% for both starter and trade-up homes and 3.6% for premium homes.
