By Lily Ray Wyss, June 22, 2022
By Lily Ray Wyss, June 22, 2022
So first off we have some actual numbers to show that the market has officially started to shift!
When talking about our current market shift I am quick to point out that we are still certainly in a seller’s market. A balanced market is 6 months of inventory and we have just finally gone up to one month of inventory. So we are still nowhere near balanced.
But with that being said we are feeling a shift and now seeing it play out in the data.
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One month of inventory while still historically small does show some promise of a shift to more balance when seeing that we have been struggling to gain back inventory for the last 7 months.
We also are continuing to see a rise in new homes to the market with 3,684 new listings in April a 4.6% increase. Meaning more opportunities for buyers and more competition for sellers.
Sold homes and pending sales also saw an increase though, with 2,916 homes going to new homeowners (an increase of 4.8%) and 3,122 homes going under contract (a 3.9% increase). Showing that while demand has lessened some due to higher interest rates, market instability, and buyer fatigue, buyers are still out there shopping and demand remains high overall.
Okay lets talk more about where we are seeing a shift other than higher inventory and a greater number of new listings.
Us realtors are seeing it in our day-to-day activities.
Just this weekend after showing a bunch of homes to buyers I was getting texts and emails from listing agents asking for feedback on the homes.
This might seem small but in the super hot market, homes typically sold before feedback could even be asked for.
On Monday a realtor even asked me what I thought of the house’s price and if it was too high as they had little interest.
That has honestly not happened in a long time!
Additionally, when it comes to offering on homes we are seeing maybe 2-3 offers compared to 7-10 on the average home and terms are often not as extreme.
What does this mean for home buyers?
While you should still expect to offer competitively above list price and with good terms, your competition most likely will be less and you shouldn’t have to write your offer immediately after the showing in fear that it will sell before you can write.
Because the market has only shifted slightly you also will want to come into the transaction prepared to take on the majority of the home repairs. If you are interested in older character homes, especially in a desired area, you best believe you will be expected to still take on the knob and tube wiring and siding repair.
If you are not prepared to take on that financial and or physical effort we can talk about home options with less maintenance (newer builds, shared communities, higher budget, etc).
Though another caveat, with the slight shift we have been more successful at negotiating hard and getting sellers to cover large health and safety concerns. You just don’t want to bet on it.
What does this shift mean for home sellers?
Be prepared to do more to prep your home for sale, price strategically, and don’t expect a huge rush of buyers the second your home is listed.
We are noticing more homes falling out of contract as the market shifts, so it’s important that you do all the small projects around your home so buyers can see and get the impression that the home is well cared for. Especially when they are reviewing an inspection report.
This means small items like tightening a loose door handle or fixing a leak in your bathroom faucet or semi-larger projects like calling someone to remove the moss from your roof and clean your gutters.
Pricing your home right is also ever important. If you list your home at too high of a price the risk of it sitting on the market is great. And when home buyers see a home sitting on the market the first thing they think is “what’s wrong with it?”.
So pricing strategically using comparable data but also following market trends is key. And don’t worry we realtors are here to help with this.
When it comes to buyer activity, be hopeful that you will get a great price for your home as prices are still on the rise with the average home price last month being $615,600, but don’t expect a massive jump in price and a ton of activity.
My last piece of advice whether you are buying, selling or both, is don’t get too caught up in the headlines and trying to time the market.
As my mentor said the other day, real estate is designed as a long-term investment, it’s not made for day trading.
Timing the market perfectly is never possible, and overall real estate remains one of the most stable investments you can make.
The best we can do is analyze the data, look at past history and make decisions based on what is going to work best for us personally.
If you want to talk more about the market based on your particular needs, I am here to chat.
You can contact me HERE.