Your Home: The gift of the shift

It is almost time to say Happy 4th of July and not only does this time of year bring fireworks and cookouts (two of my favorite things), but it also brings a shift in the real estate market. This shift that I speak of is normal for this time of the year. Historically, we see the highest absorption rate (percentage of active homes going under contract each month) during the early spring market and from then through the rest of the year this rate continues to slow. Yet again this is the case in 2016.

In most markets in the city, the fastest rate of absorption took place in February and March of this year. This was when the supply of homes was extremely low and at the same time the demand was kicking into high gear. This was probably the time of year when you were hearing unbelievable stories about bidding wars and and homes selling for 10 percent over list price. It was bananas to say the least.

As we shift into the summer market, more homes are available for sale. And although the demand is still high, it is not absorbing the active inventory as quickly as it was earlier in the year. Have you noticed more for sale signs recently? Probably so. This is not necessarily a bad thing. And we are still in a great market.

Here’s why.

Moving towards a more balanced market is healthy. A strong seller’s market or a strong buyer’s market are fun for a while, but they are not healthy long term. As with anything, you can only stay out of balance for a certain period of time before you have to counter balance. A more balanced market provides opportunities for both buyer and seller. And we need both sides to sustain a healthy real estate economy.

A balanced market is less emotional. Earlier this year, in February and March for example, the market was crazy! Sellers were receiving multiple offers for well over list price. Buyers were panicking to find a home and they were throwing everything in minus their first born to try and be the winning bidder for a home. Calling it emotional would be an understatement. Although this type of market can be fun for a seller, it is no fun for the buyer. No fun at all. And even though the sellers are having fun, they are anxious. They have dollar signs in their eyes and their greatest fear is to leave money on the table. Can you see how fear of not getting a home on one side, and the fear of not getting every dollar possible out of the sale on the other side can make for a highly anxious environment? As the market shifts and balances out more, the playing field is leveled a bit and the environment feels much more like a win-win. Calmer heads are allowed in a more balanced market, and personally, I prefer it.

Finally, buyers will have more options. And options are great! Don’t get me wrong, in most markets we are still in a seller’s market. And in some, a strong sellers market. But as we shift, more and more housing options will present themselves. For the potential seller out there who has been scared to sell because of the fear of being homeless, your prayers may be answered in the coming months. As this additional inventory hits the market, the sellers out there need to be aware of this new competition. When buyers have more options, they tend to expect more from a home as it pertains to condition and home prices will need to get more competitive for a seller to sell quickly.

Overall, a shift in the market has gifts to offer both buyers and sellers. As the market shifts, it is important that you connect with a local Realtor to keep you ahead of the market. If you have questions about how the shift will affect your home purchase or sale, feel free to email me. Our team is here to help!

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