PROFESSIONALS ARE CRITICAL IN THIS MARKET….That title should actually say “Professionals who are market experts are critical in this market”. It seems clear to us that the market is shifting. 3 of the four indicators above in the graphic are indicating this shift. Clarity is power, so there is no need to be fearful or upset. Let's look at the details and see what it all means...
DEMAND: For the second month in a row, demand was down by a noticeable difference. Year over year, September was off by 12% and October by 8%. We’ve been noticing the activity has slowed down as well, as far as showing and offers on listings. For example, we had a listing in West Chester that recently took 11 days to sell and it sold for less than asking price. If that had been on the market in the spring, it would have sold over asking and with multiple offers. While this doesn’t “prove” the market is shifting, I’d be willing to place money that it is, especially with what continues to happen with Supply and Inventory.
SUPPLY AND INVENTORY ACCUMULATION: For the last 4 months, supply and inventory accumulation stats have been losing ground to the increase it’s enjoyed over last years numbers. This month, the inventory accumulation levels were almost identical to last years numbers. In and of itself, that doesn’t mean too much. However, when you pair that with the increasing supply and lessening demand, it all but proves a shift.
SOLD TO LIST RATIO: The Sold to List ratio continues to ride above the stats from last year. However, remember that this is a lagging indicator because those figures are determined at least 45-60 days prior. It’s a residual affect of the craziness of the market from the past. This stat tends to take 3-4 months to catch up with what the supply, demand and inventory stats tell us.
CONCLUSION: Intentionally, over the last 3-4 months, I’ve been asking agents whether they think the market is shifting. Very, very few seem to see it shifting. In fact, many believe that the market is only going to go up. That’s exactly what folks thought in 2005-2006… and then the rug was pulled out from under them.
Please hear me - This is not shared to scare anyone or cause fear. There is no need for emotion to be attached to the market. When that happens, it tends to cause people to make bad decisions. I share this because CLARITY = POWER. When one understands exactly what’s going on, then whatever steps they need to take become clear.
What we don’t want to see, are folks entering into a shifting market and spend months on the market chasing a falling price and end up losing thousands of dollars because they didn’t know exactly what the market was doing. This also underscores the critical role that a REALTOR should play. Not all REALTORS are created equal. Make sure they know the market, make sure they truly have your best interest in mind, make sure they are professional.
WHAT DOES THIS MEAN FOR SELLERS?: As mentioned, your agent matters greatly. They must know what the market for your home is doing. Pricing and condition become extremely important in a shifting market. If you have been on the market for more than 30 days, and you are serious about selling, it’s time to look at making a significant shift in price. You must get ahead of your competition. If you do not do this, then you will chase a sinking value like a soccer ball rolling down a steep hill. After 30 days, the market has clearly spoken about the value your home offers and you must make an adjustment.
Trust me, I know this is hard and possibly very painful to hear. However the alternative is more painful and we certainly do not want that for you! You’ve got to ask yourself, what’s the price I pay by taking one path over another. If you do not get ahead of pricing, and you must sell, while it might cost you a few thousand now, it will likely cost you tens of thousands in 2-4 months.
WHAT DOES THIS MEAN FOR BUYERS?: If you do not have a home to sell, it means that your agent must know what the micro market you are looking to buy in is doing. If your need is urgent, you will have to give a little more into what the sellers want than someone who’s need is less urgent. Typically, sellers are slow to accept and realize that the market is shifting and therefore will be slower to set their price where it needs to be.
If you plan on being in your home for 10 years or more, then if you pay just a little more for a home you love, you will be just fine. In the long run, it’s not going to matter quite as much. If you have reason to believe that you will only be in your home for a few years, it will matter more, however you still can’t force a seller to face reality, and if you find a home you absolutely love, just make sure you have a firm grasp on what’s going on.
If you have a home you need to sell and you need to buy, (which is a difficult situation to be in, no matter the market), it gives you a little more power on the buying side, which can help. However, you must live in reality on the pricing of your current home and make sure you are fully understanding what the worse case scenario is with what you will walk away from in the sale of your home.
Our mission is to “DRAMATICALLY IMPACT LIVES THROUGH REAL ESTATE”. We study the market daily in order to make sure our clients have the most up to date information possible. If you are considering a selling your home in 2018, please call us. We’d be thrilled to interview for the job to help you with this transition.
Call us at 484-696-4833 today, even if you are 12 months out from moving. We are offering FREE STAGING right now, which is a $250+ value to you.