Despite a lethargic market, sales continue to close. This week 9 transactions closed, last week 10. But this statistic can be misleading - how can so many sales be closing when there are hardly any homes on the market? The answer is that all of these transactions went into contract at different times starting over a month ago. A sale is only closed once it completes the escrow process, which can take weeks or even months from the time the offer is accepted and the purchase is in contract. All of these closed transactions had relatively long escrows, which typically signifies that the purchase agreement included one or more contingencies.
Of the 9 sales that closed this past week, the one that was most recently listed was done so on the 11th of December. An offer was accepted on that property on the 17th of December - only 6 days after it was listed. So the fact that the transaction didn't actually close until just last week, on the 15th of January, means it had an escrow period of 29 days. In the busier months of 2015, it was more common to see escrows in the 0-15 day range.
So what does all this mean? The longer escrow periods likely mean that there were loans involved in the buyer's financing, or that other contingencies (for repairs, inspections, etc.) were put in the offer which needed to be satisfied in order for escrow to close. In the middle of 2015 you didn't see this as much because sellers were fielding so many offers that they would usually have the option of choosing one with cash financing, no contingencies, or both. When the market slows down, as it did at the onset of the holiday season, buyers are able to get away with contingent offers because the seller sometimes won't have any other offers presented to them. It is a sign that a market which had heavily favored the seller for much of 2015, has pulled slightly back towards the buyer.
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