Our friends at the Cromford Report recently reported a new low on 1/14/14 of pending listings of -42.1% (year over year). This means the number of homes going under contract is shrinking when you compare it to last year at the same time. Along with this, demand is also at a point lower than we’ve seen in some time. Typically, demand spikes in the spring once everyone shakes off the holidays, starts thinking about tax season and planning for the year ahead.
For SELLERS, these details are something to watch for a few reasons. 1) If you have a cream puff home (up to date, well-maintained and in a good area), by putting your home on the market ahead of the usual rush in February and March, you might have less competition. You also want to be really conscious of your list price. Since demand is lower than it’s been, pricing competitively (being mindful of the list prices of competing homes and STAYING ON TOP of prices) is really going to be important for you. If your home is in less than stellar condition or location, really consider making improvements so your home will stand out, or again, adjust the price accordingly. The longer you stay on the market, the more buyers will perceive desperation, whether you’re desperate or not.
If you’re a buyer, you also want to pay attention here. Having fewer homes to choose from isn’t better for you, but list prices have been coming down, which means that a home that seems out of reach, may actually not be that far off from your reach. The key here is having your agent know the value of the home (not what you want to pay for it) BEFORE you write an offer.
For example, one of my buyers haggled for a week with a seller at the end of November. We settled on a price knowing that the home likely wouldn’t appraise. It was a bit of a gamble, but when all was said and done, the home appraised for 3.2% less than the contract sales price and the seller lowered the price. So, if you’re financing a home, know you have that safeguard in place. Even if you buy with cash, you still have the right to have an appraisal, you just have to know when you can do it.
Whether an influx of homes appears in the market will be a big piece of the puzzle. The numbers are ticking up steadily, but we have to take things one day at a time. Just know, if you need to make a move to buy or sell a home in the next 30 days, be armed with all of this info, make sure you have a very competent REALTOR® (ME!!) and check back for developments!