I thought I would share my thoughts on the current market conditions in order to help people evaluate their situation when it comes to buying and/or selling a home.
I first noticed the market slowing down to where it wasn’t a true frenzy around May. The market was still very strong and there were still multiple offers, but it wasn’t the absolute insanity that it had been in the months prior to May.
And, as time went on, I could see a continual slow down, still strong, but less and less multiple offers, offers not going as significantly over list price, and those types of changes. Also, during the summer there was more inventory to choose from and interest rates creeping up a bit. I was able to sneak buyers into homes that had been very frustrated with all of the competition of months past, who some felt like giving up on buying, but then had flicker of hope and the drive to keep going and were able to lock in a home.
In the last 2-3 months, I have seen homes actually sitting on the market and not selling at the prices that comparable homes had sold in the months prior. Some homes even selling way below the last comparable homes, like $100k+ less, some even hundreds of thousands less than the comparable homes from the peak of the 2018 market. And, I see many, many price reductions for homes. Some homes even having multiple price reductions.
My thoughts are that since the end of 2017 to early 2018, the market went really crazy, it can’t sustain those types of price jumps forever, so over time, it calmed down, and now we are more in a correction phase for 2018, at least. Prices really peaked, but it got to a point where buyers started to call it quits for paying any more for a home. Buyers just can’t continue the cycle of bidding up homes sale after sale after sale for indefinite periods of time. It has to end, slow down, and/or make a correction at some point.
A lot of people ask about my opinion for the current market conditions. I am not a fortune teller, but historically and statistically, this is a fairly normal yearly cycle. Sometimes it doesn’t go exactly as the prior year, of course. But, overall, typically 1st quarter is when there is a market frenzy, often the market does calm down around summer, as the end of the year approaches and inventory goes down again due to holidays and such, it can be a time where buyers have an opportunity to get into a home while the market is calmer and before it heats up the following year.
So, if history repeats itself and we do have the normal cycle, now may be a good time to buy. The market is calmer, homes are staying on the market longer, there are a lot of price reductions and motivated sellers, interest rates are still good, there is more likelihood that sellers will negotiate on price or maybe even do some repairs, there is more likelihood for FHA/VA buyers and also low down buyers to have a chance to lock in a home before competition starts up again. Right now, I would encourage those buyers that are FHA or have a low down payment, who do have trouble competing with other buyers in a fierce market, now may be the time to lock in a home before it gets unachievable again. It also may be a good time for those that already are homeowners to make the move to another home. It may be more likely that a seller will be willing to take a contingent offer, if the seller has no other offers to consider.
It’s better to buy when no one else is buying and sell when no one else is selling, even if that’s not the popular way to do things. Those times are when buyers get better deals and sellers get top dollar, when they go against the grain of what everyone else is doing. I know people sometimes try to predict the market and try to either figure out the bottom or the peak…and that is typically a very hard thing to do, and often they end up missing what they are trying to achieve. And, if this is a normal yearly cycle, that means early 2019 will be a frenzy again and prices may likely increase from the prices they are today.
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