Home Owners not Selling, Buyers want to Buy!

This whole COVID 19 debacle has left the real estate market surprisingly hot. It's not that there are lots of sales, because there isn't. It is simply that the typical number of summertime sellers didn't materialize this year. Many homeowners are not selling right now whether due to Corona fear or something else altogether.

Meanwhile the downturn in jobs we see as a result of the COVID pandemic has slowed the demand a little, but the supply took a bigger hit. Last summer things were cooling off leaning towards a neutral market. This summer sellers are once again in the driver's seat in top down price ranges from 150% of median to the sub-median market.

This tight resale inventory has the local builders in solid spot as many would be resale buyers are looking at new construction to meet the demand. The local builders have their own issues related to COVID and other market forces like a supply of sub contractors and potential work shut downs every time the case load pops up and the Governor gets the itch.

What a strange and wild year 2020 has been. But at least the local real estate market can benefit from a very respectable demand against a tight supply. The mortgage rates are are helping the fuel the demand as well with buyers seeing rates the likes of which have never been seen before. 

Is the market tightening up again?

Maybe this is nothing more than an anecdote, but our real estate market last year really felt like it was moving towards neutral conditions. But the market has come out a bit hot in the first month of this year with more buyers and not much extra inventory for them.

Now if you have the coin to toss around for something in the $600,000 plus range, you should have no trouble finding an eager seller. But down in the 'trenches' of the mainstream, things seem a bit tight and sellers are starting to take control again.

Perhaps the fact that interest rates are again dipping down into the 3's for well qualified borrowers, the buyers are swarming again! What ever the case, it will be interesting to see if the spring listing season levels the playing field or is met with an equal dose of hungry buyers.

Marketing trends seem to indicate that inventory levels are steady at a quick clip of around 2 months to a pending sale. Well priced homes will see bidding and overpriced houses may sit, but this market decided that 2020 was gonna be a 'thing.'

Buyers ought check in with their loan officer and make sure they can capitalize on these reduced rates and sellers should get ready for more showings because things are looking good for Q1.

Slight Softening could be Golden Opportunity

Prices are stable in the local market with modest appreciation in values. I am seeing a little bit of a bump in inventory which is a much needed softening of the heavy seller's market we battled last spring.

Buyers that were frustrated over the summer with multiple offers and aggressive competition for property in what was a very tight inventory situation, may find that things tempered a bit. It seems like the number of buyers has lightened a touch and a modest gain in sellers is leveling the market into a healthy near neutral condition that just slightly favors sellers.

This is more evident in the upper price ranges but even in the sub-median market I see openings for buyers. Interest rates are nudging up and that can lower the buying power of buyers. This current moderation in the market coupled with still very low mortgage rates could be a golden opportunity to strike a deal for a house.

The classic fence sitters are faced with an opportunity that may not be around by summer. With rates on government backed mortgages still in the low 4s, and a slight flattening in appreciation, the time is now for buyers. Buyers should remember that historically speaking, any rate under 6% is a "low" rate. We have been under 6% for a very long time so some people may be under the delusion that 5% is a "high" rate.

I have written on this very blog about the dangers of waiting for a better price in a rising rate market. Rate will almost always hurt the bottom line more than price. Most analysts are predicting a modest gain in values for 2018 and rates are trending up which amounts to the classic "double jeopardy" scenario.

Get off that fence!

Market Update

So the seasonal slowdown has arrived. No need to freak out, the summer is generally the busiest time of year often with a 25% bump in monthly transaction volume between May and September. That is beginning to settle back into a more typical autumn pattern. But it should be noted that inventory although still tight has softened a bit and combined with the seasonal adjustment to demand, things are less hectic for buyers. Make no mistake, the market still favors sellers, but the ten offers in ten hours craziness we had in the spring has subsided and sellers seem to be a little bit more malleable.

According to our local MLS service here in Clark County, we are seeing the median days on market creep up a little, but still fast at just 12 days. Median price is still rising but over this summer the prices have stabilized and the increases have been modest. Median sold value in Clark County is hovering right at $300,000. Stabilized pricing is healthy as the real estate market cannot sustain double digit year over year growth for more than a few years.

This is an excellent time for buyers that failed to find a home over the summer or were not prepared to buy in the last few months to jump in. Supply is slightly up and demand is slightly down and that means the market is still very healthy but also a little more accessible. Sellers that were a tad overpriced in the summer months are ready to make a deal as they usually don't want to be selling during the holidays.

I am looking forward to a strong fall season.