Today I would like to look at how the market is and if you are ready to ride the wave. Of course, when I ask if you are ready to ride the wave, I am not talking about surfing in the ocean—I’m asking if you are ready to stay in your home for the next two to four years.
Recently I have been making a lot of calls to my past clients, current clients, friends, and family to update them on what is going on in the market. There are three key indicators I have been looking at:
- Days on market. The average time it takes to sell is going up.
- Inventory. The number of homes available for sale is going up.
- Interest rates. Much like the other two indicators, interest rates are rising and buyers are concerned that they will not be able to buy a home.
We have been following these indicators for the last four or five weeks and have noticed now that we are seeing signs of a shift coming soon. However, this does not mean that the market is not great and that if you list your home this week, you will not get multiple offers.
Let me explain. Usually we see a shift happen in the higher price points first. To know the higher price point of a certain area, you need to know what that area’s average price point is first.
Let’s say you are looking to sell in Irvine and the average price point is $850,000. Those homes are still selling quickly depending on how they look and how they are priced. Homes that are priced lower are selling even quicker. That is a very aggressive market.
Homes in Irvine that are priced between $1.5 million and $4 million, however, are taking a lot longer to sell. In this area, we’re starting to see those three indicators I mentioned above.
Over time, that trend will trickle down into the average and lower price points until everything is taking a little longer to sell, or maybe not sell for the best price.
This is when we will see the market shift from the strong seller’s market that we have had for the past seven years to potentially a flat market or a buyer’s market.
Right now is one of the best selling seasons we’ve ever experienced. In six to nine months though, this shift will start to affect average home prices. If you are not prepared to stay in your home for the next two to four years, you should know that your home may not be worth as much in the next year. You will have to sit and stay in your home until the market balances and starts going back up.
To decide if now is the right time for you to sell, think about your current situation and ask yourself if you can wait. If you think you are ready, please feel free to reach out to me and give me a call or send me an email. I would love to help you in any way that I can.