Today I would like to talk about our market. Specifically, I would like to look at interest rates, inventory, and price reductions.
If you have been following my recent videos and blogs, then you know that I have been talking about a shift in the market for about a year now. When I talk about this shift, I mean that the market may stabilize and home prices may even dip. This may occur in mid to late 2019.
For the last six years, we have been in a really strong seller’s market, and buyers have been struggling to find properties. When they do find properties to submit an offer on, they end up getting outbid because of multiple offers. Meanwhile, appraisers struggle to justify agreed-upon home prices because of increased values.
All of that, though, is coming to an end and we are going to start seeing the shift take over. For this reason, I want to talk more about price reductions.
Interest rates have been rising consistently for about a year now while home prices have been increasing for about the last six years. Inventory is now also growing because sellers are seeing an opportunity to sell their property. With the influx of inventory, buyers now have more options. This lowers the demand for property and increases how long homes spend on the market, because buyers are not making quick decisions.
Since homes are taking longer to sell, they are selling for slightly less than what they are potentially worth in today’s market. A couple weeks ago I did my first price reduction after six years and it resulted in a quick sale for one of the properties on the market for a couple months. I reduced the price on a couple listings and now they are starting to see a lot of activity.
Whether you are a buyer or seller, we are going to start seeing a lot more price reductions. It is going to take some time for buyers, sellers, and agents to be comfortable with this change because it has been so long. The people who notice this change are going to win because they will change their strategies.
If you are a buyer, stay on top of interest rates and make sure you know what is going on long-term. If you are a seller and you are not getting the activity you want, you may need to adjust the price. Meanwhile, if you are considering listing your home on the market, you will need to consider what you are going to list your home at. No matter what, now more than ever you are going to want to consult with a great Realtor to understand your next best step.
If you have any additional questions or are interested in buying or selling, please feel free to contact me. I look forward to speaking with you soon.