It’s that time of year again. When all the real estate Guru’s look back at 2011 and tell Realtors about “Current Market Trends.” I never go to these seminars or classes. See, if somebody has time to put together a Powerpoint presentation with a bunch of bar graphs and is looking backwards in time, then what they are telling you is called history, not current market conditions or trends.
I’m more interested in knowing what is happening right now. All realtors should really, but I find that most of them can only recite what they have been told. That’s why there are meetings and seminars for such things. There are a few in town that seem to be able to analyse the market pretty well. I like to talk to them because it gives me a broader perspective on the whole.
So, if you want to know what happened last year, I have plenty of posts from 2011 you can read. Want to know what is happening right now? Our current market trends?
1) This shouldn’t be news if you’ve read my blog recently, but every Monday I check to see how many houses got contracts and what closed. Houses up to $150k are selling very good. Then it slows down a lot the higher you go in price. The closed deals show me what percentage of the asking price the seller is getting compared to their list price. We’re still holding strong between 96% and 100%. About the only time I see percentages less than that it is in higher priced houses or ones that the asking price was too high to begin with. It does drop for surrounding counties. The Lexington agents seem to want to price a house very close to what it is worth.
2) Most of the foreclosures we are getting in Lexington seem to be cheaper houses these days. I think that has really created two markets in town. When foreclosures first started becoming a large part of our market, many buyers would look at normal sales and foreclosures. I think we’ve run though most of the middle class and upscale foreclosures, so all that is left are the cheaper ones that investors rent or flip. A lot of people were caught in a sinking ship when the economy changed back in 2008. The 2009 and 2010 foreclosures were mostly those folks who were in the wrong place at the wrong time. I think the foreclosures we are getting now are due to the easy lending practices of yesteryear more so than the economy. I check the Master Commissioner site every week and it seems that most of the people on that site bought between 2004 and 2007.
3) I am seeing more buyers staying at the lower end of their price range. It use to be, and not too long ago, that every buyer would start looking at the bottom of their price range, then move up, up , up and then purchase at the top. People seem to want to be more fiscally responsible these days. I think that is a good thing, especially for those of you that own a nice, sensible home in Lexington priced between $100k and maybe $180k. I’ve also had several buyers not want a lot of square footage. People aren’t wanting to maintain, heat, cool and clean more house than they will use. These are mostly the buyers in their 20’s and 30’s. Use to be that was only something you heard from downsizing empty nesters. This is bad news if you have a McMansion.
But here’s the truth about any market at any time……Houses that are priced realistically and show well sell. Buyer’s always want the best house they can get for their money. Good or bad, there will always be a market. Location, condition and function play the biggest role in value. Keep that in mind and you’ll always be able to make good real estate decisions.