One buyer for every 13 houses for sale according to LBAR. Many more listings than pending sales everyday…..and we aren’t even in the slow season yet. What gives?
Just like Cash for Clunkers got a lot of new cars sold and then put that industry on life support afterwards, the tax credits that expired April 30th have done the same thing to the Lexington market. I don’t mean to freak anybody out….or be all doom and gloom, but I think it is going to be a tough time to be a seller until at least next spring. Cars are selling pretty well again for the new normal, and houses will too. You just can’t expect to not have some type of backlash when just about any first time buyer who would have bought this year already did. Like I have blogged about before, those first time buyers pretty much grease the gears of the whole market. They will come back since people will always graduate, get married, get a new job, have a baby.
What do I see in the mean while? A few lucky sellers and a lot of houses on the market going into the peak buying season of spring. I am already starting to see more reduced prices than usual for this time of year. Smart sellers start reducing their prices this time of year with the hopes that somebody will come along so they don’t have to sit on their house during the dead period of Thanksgiving to New Years Day.
If you are a seller and can do so, you should reduce your price to be as competitive as possible. We are starting to see more comps from after the tax credit expired….they are different from those comps from before. Most of the time you can go back 6 months to look at sold comps, but right now I think it is wise to try to find ones as recent as possible. Even though the tax credit expired April 30th, there was still lots of time left to close those deals. So it has only been about the last 8-12 weeks that we are seeing comps from the “New Normal.”
If you are a buyer, let me tell you a hard reality. Just because it is your market doesn’t mean you are going to go in and steal somebody’s house. I see the list-to-sale percentage every time I log on to lbar, and I am not seeing anybody get a heck of a lot knocked off the asking price. The few I have seen that sold for 80-90% of the asking price were, in my opinion, overpriced to begin with. Paying 80-90% of an inflated asking price is probably more like paying 95-97% of what it should have been. You should be in the driver’s seat though for things like closing date, appliances, maybe some closing costs, a home warranty, plus come out smiling with your home inspection repair negotiations.
Don’t be all bummed out…..We’ll be loading the pipeline with a fresh batch of first timers to get things moving again soon!