BUYERS GAIN AN ADVANTAGE FOR THE FIRST TIME IN A WHILE
My overall assessment of the market is that we are experiencing traditional seasonal cycles, with one caveat; any time we are in a presidential election year, the last two quarters before the election tend to be very slow. Combine that with the economic unease created by mixed economic reports and the slight threat of a government shutdown and we are seeing more of a slowdown than I expected right now. That gives the edge in negotiations to buyers right now. This may be a temporary situation though as once the election is over and the spring selling season begins, there is likely still going to be limited available inventory for a higher number of buyers and the pendulum will once again swing towards the seller’s favor.
Price reductions are common yet values are basically stable. I mentioned last month that the market is showing some resistance to significant price increases. I’m seeing that continue with price reductions on almost half of the existing inventory in many areas. However, the final sales prices are not showing an across the board decline in values. I believe the overall market is still healthy as prices are stable and even increasing at a reasonable pace year over year. Buyers will still pay a good price, they just won’t jump at anything, it needs to demonstrate reasonable value. The only examples of values actually dropping is homes that were originally overpriced and now are trying to play catch up via price reductions to get a buyer’s attention.
On the new construction side, builders are also seeing a slowdown which is typical for this time of year. I’m seeing priced reductions and special incentives for the first time in a while.
There is more to the current slow pace than basic economics. As is typical in a presidential election year, there is an undercurrent of uncertainty and therefore there is less activity.
The entry level price point has more opportunity than it has in a couple of years. There are fewer buyers, so you’re less likely to have as much competition as there was recently.
Down payments programs exist and are not being utilized to their fullest extent. If you want to purchase because your rent payment is at least as high as a mortgage payment but don’t have a down payment; let’s connect you with a lender who can qualify you for down payment assistance. There is everything from outright grants to shared equity programs offering as much as $50,000.
Finally, great houses still do extremely well. If you have a fantastic location, floor plan or other stand out features, you will get a great response from the market. Your house will sell in less than 30 days and you will receive a very good price. This goes for every price point. Especially from about $550,000 and below.