Last month we talked about why the market isn’t crashing and the data that backs it.
This month let’s talk about the signs to look for that the market is becoming more balanced. Because while the market isn’t crashing, it is most definitely a buyer’s market at the moment. But historically, the real estate market goes through cycles, and we might be nearing the end of this one soon.
If you’re on the sidelines as a buyer or seller, this information can help you make the decision on when is best for you to enter the market.
1st Thing to Watch: Number of homes for sale
The number of existing homes for sale, and new listings to hit the market will be the first thing you can watch. As a seller, this is your competition.
For the last couple of years, inventory (active properties for sale) has consistently risen, causing more competition for sellers and less for buyers.
This year, the number of homes for sale in Sulphur Springs peaked in October at 220 homes for sale, with 47 of those being new listings. That's up from 199 homes for sale in September. It's still too early in November to see if they will continue to trend up or begin to go down.
This time of year, seasonally there are less homes that typically hit the market, so these next couple of months might not give you a clear picture on that. On the other side of that though, fewer homes still mean less competition and could be a great time to get some attention. Two sides to every coin 😉
Watch the trends week to week or month to month to see if inventory is rising or falling.
As a buyer, when the number of homes for sale decrease, your competition is heating up. There are obviously less homes to choose from and therefore it gives leverage back to the sellers. Because of this, take full advantage of a buyer’s market. We aren’t sure when it will begin to shift.
2nd Thing to Watch: Price Reductions
I mentioned in my last email that price reductions are common. Because there is so much competition for sellers, they are adjusting to the market and reducing their price to pull away from the competition. It’s not necessarily because they are “overpriced” as many people like to assume. They are, after all, pricing based on recent sales comps. But, when there aren’t enough buyers to go around, a price adjustment just makes sense.
Because of that, if you are a seller on the sideline, ask your favorite real estate agent 😇 to keep you informed on this data. In Sulphur Springs, about half of sellers currently on the market have reduced their price. Once we start seeing less inventory and less price reductions, it means that the competitive market may be improving.
As a buyer, again, remember that price reductions do not always mean that values are falling. You have a good chance of purchasing instant equity, and who doesn’t want that? That’s the whole point of owning a home – to build equity and wealth! Common price reductions means there's an opportunity that you may not get when the market begins to balance out and even push to the other side.
Combination is Key:
It’s important to remember as a seller that the combination of these two things happening is often more informative than either scenario on its own.
When less homes are for sale, there’s going to typically be less price reductions and a higher probability of selling close to your original asking price and spending less time on the market.
You Decide:
While real estate is very much an emotional decision, it’s also an investment. History and market data tell a story. But at the same time, life just keeps life-ing and we can’t always wait for “perfect” conditions. You ultimately know what’s best for you and your family and I have learned it all works itself out in the end anyway. 😊
I’m happy to keep you updated on this information specific to your property if you are questioning when is the best time to sell. There’s a strategy to every market, so if you decide now is the time, we can talk about that too.
And if you’re a buyer that is leery, let's talk a game plan. I am not just saying now is a great time to buy because I am in the business of selling homes. 😜 There are pockets of affordability, and you can WIN in this market if you know where to look and how to negotiate.
Let us know how we can help!