Did the buyers just pump the brakes on the real estate market??? In this month’s blog post, we’re going to explore this further and see what’s at play here. The short answer is yes, buyers have indeed hit the brakes and slowed the market down just a little bit. Before you go into a frenzy it’s important to note that this doesn’t equate to a market correction situation but rather just allows for a healthy market to emerge. Let’s go over some stats to back this up.
Appreciation
Since the beginning of this year, we’ve seen a 16.8% appreciation across San Diego county. This is a clear sign of an unhealthy market. What we should be seeing is a steady 5-6% appreciation year over year. We need to see appreciation slow down to avoid a scenario where we’re seeing 20-25% appreciation in one year which could lead us to a market correction.
Inventory
This slowdown is not consistent with all the figures, as we’re seeing a 47% lower inventory compared to this time last year. If you look at this month alone, we had over 2,282 new listings on the market so far and 2800 going pending. This will likely mean that we may exit July with even less inventory! However with buyer demand slowing down, this will help even out the market.
Sale To List Price
Another figure which supports a slowdown is the sale-to-list-price. We’re seeing a lot of situations where 10% to 18% over the asking price is being offered to close the deal on a property. We’re now back to an average of 3.8% above the asking price, when in May we were at 4.9%. This is good news as people are likely being more realistic about their bids and ideally we don’t get into a multiple offer situation and move along toward a more healthy market.
Property Showings
Here’s another handy stat. We were at record breaking showings for the months of March, April and May. It’s finally come down in months of June & July to levels similar to this time last year, which was a healthy market.
Interest Rates
Interest rates dropped a bit below 3%, and even less for our VA clients. This phenomenal interest rates coupled with a little less competition could add up to a good summer selling season.
Buyer Advice
All you FHA and VA buyers out there… you are back! We’re seeing a lot of VA & FHA offers getting accepted! Unfortunately the beginning of the year was a tough one with a lot of you exiting the market due to the majority of home receiving multiple offers and your offer not being accepted. It’s time to get back in and take advantage of the low interest rates! We have unique programs for all buyers out there… them here (Click Here)
Seller Advice
The tides have shifted! In order to set a new sales record for your neighborhood your property must be prepped, priced, and marketed properly. For the homes that are not… we are seeing them sit on the market. For example, we’ve taken a few properties recently where we fronted the capital and did new carpet, new paint, cleaning, small repairs, and staged the home, after which we priced it right above the most recent comp. All 3 of these homes received multiple offers and went for record breaking prices! One of them just sold for $75,000 over asking price! So as long as you’ve prepped and priced it right, you can still take advantage of the hot market. See how we did that here: (Click Here)
We hope you enjoyed this article!
If you ever have any questions at all… please reach out to us!
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