The last 12 months has been crazy. A year ago, the market was still terrible. Six months ago, it was red hot. Now? Well, it is cooling off. Don’t worry, I don’t think it is going to get worse it is just that…..well, just keep reading.
Let me start by saying I am the canary in the coal mine. I got into this business in early 2005. My first listing was one that statistically should have sold quickly. I was a newbie, but I remember thinking it wasn’t going like it should. Well, it was because the market was slowing down only nobody really knew it at the time. Hindsight IS 20/20.
Fastforward to the end of last year. I said that the bottom of the market had been reached…..at least in/around Lexington. ALL of 2013 until the past few months has been red hot. We had such a shortage of listings that houses were selling as soon as they hit the market. Realtors were begging other realtors on our Facebook group to let them know if they had new listings coming up soon because they could not find a house for their buyers. It was the first time I have ever seen anything like that. Something that I found interesting was that despite how hot the market was and all the multiple offers, I didn’t see many buyers going over the asking price. Back in the super hot days of the early 2000’s, going over the asking price was the norm in multiple offers. Guess the sting of the housing slump still had buyers a bit cautious.
So, while you are reading headlines and seeing on the news that sales are way up compared to last year, let me tell you what is happening at this very moment. Monthly sales are DOWN about 25% compared to each month this year through July. Sure, some of that is because it always slows down when school starts. Most people with families want to be in their new place before school starts in August. I am not seeing agents begging other agents to let them know when a new listing is about to hit the market. My Realtor friends aren’t posting how crazy the market is. When I look through the daily pending sales, fewer of them got contracts in the first week on the market.
I think the rising interest rates and rising prices is what has slowed it down so much. Think about it. You are seeing on the news that it is the best time to buy a house in forever, everybody is predicting interest rates and house values are going to go up. It just makes sense we had that frenzy earlier this year. It also makes sense that, just like the market after the First Time Buyer Tax Credits of yesteryear, you have a bit of a bust because almost everybody who was going to buy this year already did!
I think we will see it be this slow until next spring. Does that make it a bad time to sell? Not if your house is one of the best choices in it’s price range. Remember, as long as there is a buyer out there, they will always buy the best house in their price range. It just means that today is not as good of a time to be a seller as it was earlier this year.
Long story short…..we went from a buyer’s market, to a seller’s market, and now we are in a balanced market. A balanced market is one that doesn’t make the news. I bet that if it keeps up like this for 4-6 months, you’ll hardly see real estate make the news like it has for the past several years.