I have been helping several buyers in the $350-$400k price range which in our market is about 95% to 115% of median price for a detached home. I have seen a massive swelling in the listed units that is outpacing the pending units by a significant amount in this price area. This will lead to a flip in the market that should start favoring buyers as the summer closes.
Under 300k will likely remain RED-HOT for some time to come locally however, as there is no shortage of buyers at the entry level and inventory remains tight. But rising rates has put the squeeze on buyers in the above median price ranges. And sellers seem to be jumping in.
The local market is absolutely prime for a seller sitting on a small house in the sub $300,000 range. They can get top dollar for that house while enjoying some choice and a neutral market in the above median price range such as a house in the $350-$400k range.
If you are a seller with a small house and want to make the move up to the next level, there is a window of opportunity to sell your current house quickly and for a great price, while having a little room to negotiate with the sellers above $350k. We had this same scenario when the market first emerged from the recession and we have it now that things are settling in. A 3 bed 1 bath starter house with 1100 SF in good shape can fetch $280k and that seller can upgrade to a similar quality two story 4 bed 2.5 bath home with 2000 SF for only 10-15% more money! This is GOLDEN!
TRAILING indicators, rather than the listed vs pending data which are LEADING indicators. Trailing data shows what already happened, leading data shows what is likely to happen. For example the pending units in the chart above shows a trend DOWN but sold data is UP. The pending line leads us to the conclusion that the next months closed sales will be either flat or down. If this data line trends out to the end of the year, we will see a complete change from this weak sellers market to a moderately strong BUYER's market in the above median price range. Again above 350k here, and it progressively softens the higher up you go in price range.
Sellers need to understand this. The ship full of overpriced listings sailed away. I showed several overpriced listings that even made my clients shrug their shoulders. They didn't even want to deal with the idiot trying to sell their house at that price. Nobody wants to enter a contract with an unreasonable person. In 2016-17 overpriced listings were fine in this price range because there was no inventory and prices were rising. But this year the market appreciation is flat. If a seller is waiting for the market to come to him, they are going to have to wait quite awhile.
Price the house right and it will sell. That is good advice in almost any market and it is absolutely gospel in this market. Sellers above the median could find themselves chasing the market down if they try to get greedy. Potential sellers sitting on a sub median starter house, you have a window right now! Interest rates will push that window of opportunity closed soon.