The question I am asked most frequently asked when people learn what I do is: how is the market?
Knowing the market is very important when it comes to gauging the health of an area when it comes to real estate. I will share some insight and statistics that can make the job a little clearer to the homeowners in the area when broaching this sometimes confusing subject.
Being informed is a great way to help make the decision to move up to a larger home, downsize, or stay put and guard your investment.
Let’s begin by explaining what the market data means and how REALTORS® interpret it to get the most accurate information when presenting to potential clients and interested parties.
The number of current listings on the market is usually the first indicator utilized. When the current number of listing are broken down into different price ranges, you look to see if there are enough listings to support 6-months of buyers.
This is a major gauge that agents rely on to show that the market is most likely even in the area.
When there is less than a 6-month supply, it usually indicates that there are more buyers looking for new homes than available homes currently on the market. This sometimes leads to bidding wars and higher purchase prices for the best showing listings.
This data needs to be observed over a continuous timeframe, as a quick increase in listings can indicate a shift in the market. This occurrence can and often does happen during high-volume sales times such as Spring, leading to more homes to be chosen from and longer time on market.
Currently, there are some interesting things happening with the number of houses, and can change quickly depending on the listing price range of the homes.
In the range up to around 300K, the trend data shows that there is a consistent seller’s market. as the number of listings are almost half of a balanced market.
Moving from 300k to 500k the market is still under the 6-month supply and balanced market numbers, but closer to the inventory needed to sustain an equal market for the area.
In most recent months, an interesting price range to watch is in the 500k to 750k price range, where a few months ago the area was steady, but the increase in the number of listing has led to surplus and a shifting to a buyer’s market.
Over the 750K price range is lush with homes and buyers have a good choice of available properties with little competition.
When the number of available listings are broken down by price range, you also have to take into consideration the current market rates and the number of qualified home shoppers.
Starting with the lower end priced homes, the continuously and historically low interest rates, coupled with increasing rents, have pushed more buyers into the market.
Low interest rates have made home affordability available to more first-time buyers leaving the starter home market to have less inventory, rising home prices, and bidding wars.
The market indicators from the first quarter of 2016 clearly show a strong market in the lower price ranges where the sellers are in clear control.
When looking to the higher end properties, new availability is giving many more options to buyers, making listings reduce price and/or use creative marketing to compete with the increased number of houses available.
Whether you are looking for a $180k or $1.2 million home, I hope that this information has been able to give you a little insight on the current market and how agents use the data to help their business and clients.
An understanding of the current conditions is imperative when selling or purchasing a home.
If you would like a free market analysis or would like to speak about your real estate needs please feel free to contact me. The only bad questions when it comes to real estate are the unanswered ones.