More pending home sales are transitioning back to the market, according to a recent report by Trulia, with the sale fail rate almost doubling in the last year, reaching 4.3 percent in the fourth quarter of 2016. Sales are falling through the most in the West, led by California.
Starter home sales failed most in the fourth quarter of 2016, with a 7.1 percent rate of lost deals; trade-up home sales were at a fail rate of 6.7 percent, and premium home sales at 3.8 percent. Unfamiliarity with the process on the part of first-time homebuyers—often in search of starter homes—may be a contributing factor, according to the report.
Homes at opposite ends of the age spectrum, however, tend to see sales fail less than others, with sales of homes built in 2016 failing at a rate of 2.6 percent and sales of homes built from 1900-1920 failing at a rate of 3.5 percent in the fourth quarter. Sales of homes built from 1959-1969 failed at a rate of 5.2 percent over the same period. According to the report, only 40 percent of homes built before 1980 are considered “premium,” compared to 70 percent of homes built after 2000. Because premium home sales have less of a rate of failure overall, the fail rate for newer homes follows suit.
The markets with the highest rate of failed sales in 2016:
- Ventura County, Calif. (11.6 percent)
- Tucson, Ariz. (10.8 percent)
- Atlanta, Ga. (10.4 percent)
- Fort Worth, Texas (10.4 percent)
- Los Angeles, Calif. (10.3 percent)
- Charleston, S.C. (10.3 percent)
- San Jose, Calif. (9.7 percent)
- Orange County, Calif. (9.6 percent)
- Portland, Ore. (9.3 percent)
- Akron, Ohio (9.3 percent)
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