Today the sun is shining and after three weekends of rain, we finally witnessed a good open house flow of traffic throughout the county. Let’s face it, no one likes to trample through wet driveways, around sloshy garden beds and put on booties to protect floors at every house. All signs point to a brisk spring market.
My March poll results with Nextdoor neighbors reinforces the perception that the market will be up this year. Early indicators showed a decrease in values than in the last week. the majority (57%) of pollsters agreed we would see appreciation this year over the minority (42%) who think we will see depreciation. (see graph below)
So where are we now that we have three months under our belt. We can see that January grew in both new listings to the market as well as more sold homes than December. We continue to see a slight decrease in new listings in February and in March, while the sold inventory continued to climb. Consumers are out buying homes in spite of the rain.
January, February, and March all are lower in sold properties than 1 year ago. We can see from the chart below that our year over year same quarter comparisons show we are up .07% in new listings, down -13.6% in sold’s and down 14.2% in pending sales. I pay close attention to pending sales because pending sales can predict the future of the market. The red flag in this chart is the March 2018 vs. March 2019 pending sales down -19.2%. That’s a lot fewer homes that will show as sold in April 2019. Many of you may be thinking prices will continue to go up but the numbers suggest otherwise.
Some additional statistics that will help you in making a buying and or selling decision this Spring. Our Days On Market (DOM) has increased significantly. The days of multiple offers, selling for way over asking are disappearing fast. In fact, homes are now selling for as low as 96% of the sales price as demonstrated in the month of January. This should help both buyers and sellers come together with offer expectations. Understanding a $400,000 listed price should expect a buyers offer to be as much as 5% to 7% less than asking and settle around 3% to 4% less. Would you accept a $384,000 offer on a listed $400,000 home? This might be our next poll question. Stay tuned.
The good news, depending on if you are a buyer or seller is we peeked in pricing about a year ago. We slipped pretty strongly from June 2018 through September 2019 and have now started to recover and what we in the industry term as “balance”
Let’s Hope For Continued Low Rates
The real driving force behind all this data is our interest rates remain very low (Current rates are hovering in the mid 3’s) and continue to make housing affordable. (Yes I know I just used affordable and housing in the same sentence in California). In our last update, I pointed out that buyers waiting for prices to drop may find themselves paying more for the home if interest rates climb. Check with your lender. Most of us are staying put longer 5 to 7 years vs. 4 to 6 years of homeownership turnover. Unless you are paying all cash, what matters most when buying is your interest rate. It won’t make a difference if prices drop 10% and rates go up 1% you may find yourself paying more.
I would love to hear from you and welcome your feedback. I hope this helps you make a good decision when it comes to housing.
WELCOME TO HOMEBOT
I am excited to let you know that I have invested in a new technology called Homebot that you can enjoy (free of charge)!
The free monthly email called the “Homebot Digest” offers homeowners a highly personalized report containing valuable information to empower you to make smarter financial decisions when it comes to your home.
What will Homebot track for you? Take a look below…
- Current and historical estimated market value of your home
- Appreciation since you purchased your home
- Net worth/equity in your home
- A breakdown of principal and interest paid
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- Estimated rental figures for your home (or a room in your home) on services like Airbnb or VRBO
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