We are seeing a great surge of inventory in our local market. In fact, we are seeing the spring inventory hit about a month sooner than when we typically expect it to. The rates are lower and the buyer appetite seems to be stronger than ever, making the market very exciting. Many of you probably heard in the local news last week that it’s a “buyers’ market.” Thankfully most of us learned a long time ago not to believe everything we hear in the news.
Right now, we are seeing a very balanced market based on our experiences in the past and the statistics are saying the same. Properties priced appropriately, i.e. those based on comparable sales and not Zestimates or just what feels right are typically receiving an offer within the first three weeks. The homes that are priced even a bit optimistically tend to sit. The current trend remains the same – those homes that aren’t priced appropriately are actually receiving less in the end, then they would have had they priced appropriately in the first place. It goes without saying the end result for the seller is less money at closing. Many of the homes that are overpriced end up making a reduction, then when the offer does come in, it’s on average 92% of the adjusted listing price.
On average, Buyers are viewing 7-12 homes before they are finding the “one” and during that time they are getting a real good sense of what the market values are. They are keeping an eye on inventory, including which properties are selling and for how much. From the moment they see something online, coupled with their first steps into the home (if they go so far as to make an appointment) most of them can tell if the home is priced fair or if they seller is stretching the value. For the properties that are overpriced, Buyers often respond, “I’ll just wait and see what happens” instead of writing an offer and testing the sellers flex in pricing. In our experience, by the time the seller reduces their price those buyers have either bought something else or are no longer excited about the house… After all, it’s been on the market for 30+ days at this point. Given most residential sales are driven by emotion, a lot of excitement gets lost when “fresh from the oven” transfer over to the “day-old bread” rack.
Think of it this way – when a new listing hits the market it is like new fish heading upstream into a pond. All the buyers (anglers, per se) are circling around the pond, waiting for new inventory to hit. The best chance of capturing a willing and ready buyer is at the beginning of the marketing period when the house is vibrant and new. After the debut, we are basically waiting for new Buyers to enter into the market because all the others have seen what you have to offer for your price and they aren’t jumping at the opportunity. Showing activity tends to slow after a home has been on the market longer than 30 days. We usually can help re-introduce some interest by changing our position in the market, which typically means repositioning the property in a new buying pool (price adjusting).
It can be helpful for sellers to look at what else is for sale in the same price band as their property. Sometimes, by putting on a Buyers hat, a Seller can get a better understanding on why their home hasn’t received an offer just yet. One of the most important strategies in today’s market is being proactive with price adjustments. Don’t let your loaf of bread become a giant stale crouton before you realize you aren’t priced appropriately. Homes are selling… heck, we had eleven new transactions in a two-week period. Half were our buyers and half were our sellers so it goes without saying things are happening and for both sides.
Don’t believe everything you hear broadcasted on the media. We would agree that the market isn’t favoring over priced homes but to go as far as saying it is a buyers’ market is quite a stretch. The current market is a fair market for both sellers and buyers. In the end both parties seem to be sleeping well at night and enjoying the next “move.”
If you are interested in knowing the current value of your home we would love an opportunity to meet with you.