Every month I get asked when the market will settle down and be neutral or perhaps swing back towards the buying side. And of course, the direct answer is "I don't know". But I do have some anecdotal data, and more importantly, some hard sales data that can help us peer into this murky crystal ball.
Lately, with very few exceptions, Trustworthy Agents Group lists one or two properties on a Friday and reviews multiple offers with sellers the following Monday. When that property is in a high-demand area and well presented, the number of offers is 5-10. Many of these offers are well above asking, and several with cash appraisal guarantees. When in a lower-demand area, or maybe not quite as shiny, the number of offers is 1-2. These offers are generally "at" or slightly over asking, and may have a moderate appraisal guarantee. This behavior has been consistent for the last 3 months.
Hard Sales Data:
The prelude to this data is that the economics of supply and demand is never more true than in Real Estate. Low supply, high demand equal higher prices, and competition. High supply, lower demand equals lower prices. Consider the following data trends.
New listings in Hampton Roads this year are low compared to previous years, but show the typical upward trend as the market year gets started:
February Listings: 2,814
March Listings: 3,861
April Listings: 4,152
May Listings: 4,142
Homes Under Contract:
*Note that there are almost as many homes going under contract each month this year as are listed:
February Under Contract: 2,823
March Under Contract: 3,409
April Under Contract: 3,633
May Under Contract:3,615
Homes Sold (closed sales):
Sold homes were typically placed under contract 30-45 days prior, but the trend is the same as listed as 'under contract':
February Sold: 2,299
March Sold: 3,060
April Sold: 3,341
May Sold: 3,318
Number of Days to under contract:
This is where the story is really told. Here the trend was downward this year-homes are being sold with unbelievable speed. We don't have June's data yet, but it will be interesting to see if it matches April/May or moves upward or downward:
February Days Under Contract: 15
March Days Under Contract: 11
April Days Under Contract: 8
May Days Under Contract: 8
So what do the experts say?
Depending on who you are listening to, Real Estate is at the top and ready for a crash or we are near or at the top and leveling out. You can find "predictors" all over youtube, with lots of sensational headlines. The CEO of Redfin says their data suggests that the market is still strong with the only difference being the number of contracts a new listing will receive. It was 15-20, now it’s 8-12. I remember when we were excited to get 2-3 offers. Both Redfin and Zillow feel that we will continue to have a strong market through the end of 2021 and that the market will favor selling over buying. Neither speculated much about 2022.
Remember the Real Estate market is hyper-local. One neighborhood could generate 15 offers and another only 2-3. Hampton Roads for instance historically had sellers paying buyer’s closing costs (this mostly stopped midway 2020), while elsewhere across the country buyers paid their own closing costs. It is generally believed that our sales prices had this 2.5-3% "baked" in, and allowed military buyers to secure a property with basically zero out-of-pocket costs. This isn't the case now, but the point is the Hampton Roads market was different. Real Estate is Hyper-Local.
If you or someone you know is thinking of selling - the market still favors you. If you want to know what your house might be worth in today's market give us a call. If you are waiting until after school lets out, or perhaps the fall to sell, and want to know what things will make your home that "shiny penny"-give us a call. We will walk through your home and write a thorough report on the things that will make you the most money for the least investment.
Find out what YOUR home is worth in the current market. Whether you're considering moving year from now or tomorrow, understanding the current value of your home can help you base your decision-making on hard facts.
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