March 11, 2019
Not only have the clocks changed, so has the housing market.
The Spring Market: The best conditions to sell a home are right now. The season is changing and so is the housing market.
Housing has been accelerating all year and is officially moving at full speed. It took a while to ramp up, starting the year with an Expected Market Time of 140 days, a slight Buyer’s Market. The market has improved dramatically since, on the backs of dropping interest rates. Back in November, rates nearly reached 5%. They dropped to 4.5% by the start of 2019. They recovered even more, dipping to 4.35% by the end of February. As a result, more buyers entered the fray and demand increased by 91% since January 1st. Last year, it improved by 61%.
As the New Year unfolded, the market sped up. By February, it transitioned to a Balanced Market, one that does not favor buyers or sellers. It continued to develop, and the Expected Market Time just dipped to 84 days, a slight Seller’s Market.
Before sellers jump up and down celebrating a return to the housing run, this is not a market with rapid appreciation and multiple offers on every home regardless of the condition. This is not a market where sellers get away with stretching the asking price, where eager buyers are willing to pay a lot more than the most recent comparable sale. The Spring Markets of 2012 through 2018 were all HOT Seller’s Market. The Expected Market Time dropped down to as low as 33 days. That is significantly different than today’s 84 days.
From here, the Expected Market Time will flatten and not change as much as the first couple of months. Do not anticipate a lot more improvement unless interest rates miraculously drop further. The odds of that happening are currently slim to none.
Today’s housing market is exceptionally interest rate sensitive. Lower rates produce much higher demand, which is where the market is today. Higher rates slow demand. Buyers are enjoying much more favorable rates right now because of a perceived global slowdown, the trade war, uncertainty, and Wall Street volatility. But, that can change on a dime.
Advice to Sellers: approach pricing your home with extreme caution. Overpriced homes will sit without success. Currently, there are plenty of homes in every price range that have been sitting for quite some time already. It all boils down to pricing carefully based upon comparable pending and recent closed sales, condition, upgrades, and location. Buyers today want a home to be turnkey and ready to go.
Active Inventory: In the past couple of weeks, the active inventory increased by 1%.
Demand: In the past couple of weeks, demand increased by 9%.
Luxury End: Luxury demand soared by 22%.