Has the Pendulum Swung?
Has the pendulum swung?
What has happened? You have probably noticed while driving around an increase in the number of For Sale signs in any given area. Back in March houses were being listed, offers were being held and homes were selling for many thousands over list price. Buyers were feeling frustrated, defeated and annoyed, while sellers were sitting back and counting their profits. Recently the government has created a fair housing plan in an effort to cool the hot market. Did it work? Let's just say it's too soon to tell, but something definately did happen in a matter of a few weeks, but what?
Let me just break things down in the simplist way. In March 2017 there were about 17,000 new listings and in April 2017 that number rose to about 21,000. This is an increase of 27%, which has created a case of more INVENTORY. So why all the new listings? Hard to say. Perhaps Sellers wanted to take advantage of the hot market, they saw neighbours selling quickly and for way more money than they expected, so felt it was time to "cash out".
Here is another number for you. At the end of March there were still about 8000 active listings, while at the end of April that number was about 13000. This is how inventory is created. Buyers were sitting back possibly waiting to see how this new housing plan will affect them. We went from 0.65 months of inventory in March to 1.1 months in April. (Just on a side note - 5 months of inventory is considered a balanced market), so you can see that we are still in a hot market. Having this increase in inventory just means there is a little bit of change, but for the better we believe.
When a Buyer has options and a selection of houses to choose from, it takes away the urgency of bidding on the house. They can, as we say "shop around". This is better for Buyers as they won't find themselves competeting for the most part. For Sellers however, they are competing with the other homes in their area, which means they need to be priced competitively. Usually, a lower pricing stragey is needed. What we are seeing is a decrease in the "holding off of offers", many listings are being terminated and re-listed at a price more in line with what the Seller wants.
Should Sellers be worried? We don't think so. There is the right Buyer out there for every home. It just takes time to find them. We have gone from homes selling in 1 day, to sitting on the market for a week plus. Seriously, this is not a long time but we have been programmed to think it is, coming out of a fast market only months ago.
So, if you are considering selling a home soon, be sure you have a realistic expectiation of what your home is worth. Don't compare it to those that have sold in March/April because those prices were inflated. If you are considering buying a home, now is a great time. There is lots to choose from and you have a bit more time to make a decision. Hey, you may even be able to snag a house with an inspection or financing condition again. Imagine that!
Need help buying or selling? Give us a shout.