We REALTORS get asked all the time. How’s the market? Well, I thought I would take a moment and share with you exactly how the market is doing. It’s an interesting time because as far back as May 2018 we started to see signs of the market slowing. This was due mostly to a strong increase in inventory. (See May 2018 Inventory Level Spike). The increase in inventory continued through the end of 2018. The demand for homes remained strong as our sales continued at a steady pace. It was the inventory slowing the market. As more sellers chose to sell buyers had more options and homes began to stay on market longer.
What’s most interesting is January took a nosedive in closed sales with only 20 homes closing escrow in the 94534 zip code for January 2019. This is a 5 year low. We have to go all the way back to January 2014 to find a similar number. Is this a big red flag? Is the market really slowing down? I took the liberty to run numbers for February 2019 and I can safely say we are not heading for a downturn in the market. February 2019 sold’s kicked back up to 39 which is close to what we saw a year ago and certainly on the upward trend. However, we continue to see a lift in new listings. 84 new listings came on the market in January 2019 and 61 in February.
How do buyer’s fair in todays market. More inventory means more options and perhaps less to pay. With all this inventory coming on the market in the last 6 months we have a few months of inventory to sell. This has created a slow down in the time it takes to sell. And more options fro buyers. Sellers are no longer getting everything their way. The days of putting your home on the market before you leave for work and arriving home to multiple offers over the asking price are long gone. This is not to say if you place your home on the market at a good fair price it won’t sell in a timely manner, It just means “A timely manner” has been redefined as three to four weeks. Still a strong sellers market.
Here’s the thing to keep in mind. A buyer can expect to pay 95% of the listed price of your home. A seller should expect to get an offer around 95% of their listed price. You can see from the data above with the sales price (SP) vs. the original listing price (OLP) now around 95%. No this does not mean as a seller you need to overprice your home. It means our prices are coming down. If you really want to sell fast and at market value then you should factor the 5% decrease in and list for less to sell first.
Why is it that the average list price is always way higher than the average sold price? Simple. More expensive homes stay on the market longer and create higher prices inventory whereas lower priced homes sell faster and create a lower prices sold number. Still, this is worth a good look.
The shocking truth about this graphic is the downward trend in listing prices. If we go back two years ago price we were going up, up, and away. We’ll now the away part is actually happening. November of 2017 listing prices eclipsed at $1,019,000. Then we see that since July 2018 we have been hovering around the low $700’s. Which is a good number and where our market should be if you ask
Now for the scary news… Look at that January number… 4.2 months of inventory. Yes 4.2 months! More than double December and almost triple every month in 2018. Apparently a lot of sellers want to sell. This is a 134% increase year over year. I can tell you that again February will be more normal back to around 40 new listings and this will begin what I believe will be the start of an aggressive spring. Not as hot as last year but pretty strong.
I am not alone in this theory. According to 105 economist and analyst across this great land they also agree that 2019 is going to be a very strong housing market.
One last thought for those buyers waiting for the bottom to drop out and prices to fall cheap enough for you to jump in and buy. Interest