Now that we are back to having some inventory in our real estate market, I thought it would be a great time for a refresher on how the market works when there are actually houses for sale.
The recent past has shown that any house will sell fast when there are more buyers than sellers. When your choice is between whatever house in your price range hits the market or hoping the next one is better, people usually make an offer on the one for sale that day.
We are back to a normal market where Buyers have choices and this is how they make their decisions.
Simply put, they pick the best house on the market. Usually this is a house that is priced realistically, that is move in ready and is in the most desirable neighborhood within the Buyer’s price range. Then there is their second, third, fourth and so on choice.
Once that #1 pick house sells, then the #2 pick house becomes the top choice. Once the #2 house sells, then the 3rd pick becomes their 2nd choice. Once the…..well, you get how this works I am sure.
Sometimes what happens though is that a brand new listing hits the market and changes the ranking. If you have the #2 house and are excited to be the next house to sell, a house hitting the market that is better than your house means you will stay at #2 on any Buyer’s list. Sometimes winter is a good time to sell a house that has been the #2 or #3 house because we tend to see fewer new listings. Eventually your house rises to become the best choice in its price range.
The goal of you and your realtor is to make your house as competitive as possible so it ranks high on the list of Buyers. Sometimes it is as simple as rearranging furniture, doing a little updating, doing a few repairs that have been noticed during showings, or even a price reduction.
While we are discussing inventory here, I want you to know that in the coming months you will see headlines about the “Average days on Market” rising. Any time you have inventory, this will happen. It doesn’t mean that every house is harder to sell. There are still plenty of houses selling fast and even getting multiple offers. Those are all the #1 choice houses, the ones everybody wants. All the houses that are further down the list will stay on the market longer, waiting for price reductions or some other change to be made which will eventually lead to a sale. In the meanwhile, those houses will dilute the average days on the market statistics.