Have you noticed? It’s not such an insane, over-the-top real estate market anymore. The thought of I’ll just throw a for sale sign in my front yard on Thursday and have a crowd of crazed buyers offering $15,000 to $25,000 over my asking price is nearly over. A shift in our real estate market is taking place.
Many sellers are searching to understand the term “Price Reduction” as they are unaccustomed to hearing that horrible word spoken to them by their real estate broker. We have seen a record number of price reductions over the last two months.
Enthusiastic sellers who overpriced their homes in May and June are sitting in their homes scratching their heads saying, “My broker said there would be multiple offers.” Those sellers and today’s sellers need of a major dose of reality, and the days of multiple offers are days of the past. This market shift will be nothing like the dramatic swing in 2007.
The price increases during the mid-2000’s were created by a surge in demand driven by wider access to mortgage financing – remember the no income verification loans. The price increases we have been witnessing in the real estate market since late 2009 are created by a huge demand from very hungry buyers and very little to no inventory for them to satisfy that desire.
Months of inventory the ratio of total active listings out of the total sold units for the current month sits right around 1.33 in July. Looking back just a few months ago our area was holding at .89 months of supply.
The shift you are seeing shouldn’t cause any alarm nor should it stop you from moving forward with your home selling/buying plans. Home prices are still going to appreciate. Last month homes in our
area saw a year-over-year jump of 8.04 percent in the median sales price. Buyers are feeling less frustrated and have a larger selection, and sellers should have no fear about their home values decreasing.
Understanding this shifty real estate market will help you successfully navigate your next move. For more information about the shift, consult your local real estate professional.
Todd Fahlman is a real estate agent who writes a monthly column for these newspapers.