What Kind of Market Are We Seeing Now?
In my 26 years of experience in the real estate industry, we’ve generally experienced balanced markets, but there have been pockets of buyer markets and seller markets depending on economic conditions. Between 2008 and 2012, the country as a whole was definitely experiencing a buyer’s market, where more people wanted to sell their homes, buyers had many properties to choose from, and prices fell as a result.
For homes in the $250,000 to $350,000 range, there was about 6 to 12 months of inventory, but in the luxury market of houses priced at $750,000 to upwards of $1 million, there were about one to two years of inventory. Having a house listed for 24 months – can you imagine?
In 2012, the market began to gain strength and became balanced. Now, at the beginning of 2017, conditions for buying and selling homes are dramatically different. Look at the maps created by the NAR (National Association of Realtors) below.
Across the nation, markets are experiencing moderate to strong buyer demand (buyer traffic)…
….while the supply of homes (seller traffic) is low.
The data speaks for itself. We’re in a seller’s market! At some price points, there are simply not enough homes for sale. This is especially true for houses priced up to $250,000.
Managing Seller Expectations
Even though you, as a seller, have the advantage now, how much can you raise your asking price? Appraisals and comps (comparable sales) affect how aggressive you can be.
If you invest in improvements or renovations to increase your home’s value by $5,000 to $10,000, you might not necessarily be able to ask for a higher price. It all depends whether or not your appraisal will go along with your higher price. In a seller’s market, comps push prices higher and home values will appreciate. However, if you ask for a much higher price, perhaps adding $30,000 more, you probably won’t get to closing.
Even if you can find a buyer willing to make an offer, if your appraiser does not feel your home merits the price you’re asking for, the buyer will need to bring more money to the closing process. This is highly unlikely unless they’re extremely emotionally attached to the property. It’s more likely you’ll go back to square one. If you live in an area with very strong buyer demand, you might receive another offer, but then the appraisal comes back into play. Not every appraiser will value your home exactly the same, but they will each calculate similar figures.
So, of course, take advantage of a seller’s market. But be reasonable, or you will negate any advantage you will have.
Is Now the Right Time to Sell?
I’m very familiar with sellers who are reluctant to sell, and those who want to “time” the market. It’s not a good feeling to leave money on the table. As the housing market strengthens, your home will naturally increase in value through simple appreciation, but who knows when it will change to a buyer’s market in the future?
You never know when you’re at a great point in the market until conditions worsen, and then it’s too late for you to sell your home at the price you feel you deserve. With many willing, qualified buyers and strong appraisal pricing now, the opportunity to sell for a higher asking price is there if you want it.
Are you ready to sell your home? Not sure how you can take advantage of the seller’s market? We can help!
How many days does it take to sell a home in your neighborhood?
Market Report tells it all.