Is the real estate market slowing down, or is it just the summertime lull? Let’s take a quick look at the numbers from June 2018.
As you can see from the chart below showing the monthly sales tracker, it is not unusual for a reduction in total sales as we head in to the hotter months of the year. I think we can all agree, that makes perfect sense. It’s hot out there!
However, it does seem to show that the brakes were applied with a touch more “force” this year over last with a drop in sales of 8.4% month over month (May ’18-June’18). Beside the heat, there are other contributing factors to this. Low overall inventory could be reflected in that drop. Buyers are coming to me stating that they have “Seen everything available”, so now they are sitting it out and waiting for new inventory. But is that new inventory coming?
The trend that we have seen all year is that new listings are scarce, and that trend is continuing as you can see below. 4% Fewer homes were added to the market in June than in May. This could also be attributed to the summer season, however there are even fewer homes on the market today than this time last year. It seems that homeowners are content with their current situation which includes the location and size of their home or, in many cases, this can be attributed to their current interest rate on their mortgage. Keep in mind, many homeowners purchased, or refinanced their homes when interest rates were in the 3-4% range. If they sold now, they would have to buy again at 4.7-5%. That in it self is a huge incentive to stay put, and reduces the amount of homes on the market.
For those that are interested in selling, don’t let the low inventory pull you into bad pricing. It may be tempting to reach for the stars on price with a mindset thinking that there is “no competition so I control the pricing”, that is not a good idea. It can only create a longer listing time, or a perception that the seller is unreasonable. As you can see in the chart below, there is a significant difference between the averages in “List Price” and the actual “Sale Price”. It shows that buyers are still willing to pay a fair price, but they won’t be taken advantage of in this sellers market.
For Buyers: Because of the summer heat, this is a very good time to buy a home. Many buyers are pulling out of the hunt because of the summer temperatures. That means less competition, and more opportunity for you to get what you want at a reasonable price. In addition to that, interest rates are steady right now but they will grow as the “buying season” returns.
For Sellers: Homes are selling quickly. With the right agent, and some great “Coming Soon” marketing many sell before they even hit the market. Hire a professional REALTOR®, perhaps me, to price and market your home appropriately.
Questions? Want to chat about buying or selling a home? Give me a call…it’s free to talk. (602) 818-6065