Too Much of a Good Thing?
I’m a pretty average runner. By that I mean that I run like the average person. I go out and do it faithfully for a few days and then I stop. A while later, I get back into it only to stop a little while later. That’s what the average person does, right? But while I’m not an expert on the subject, I do know a thing or two about the process. For the first few steps nothing changes. Then you start breathing a little harder and your feet turn to lead. In a little while, you catch your stride, and you keep cruising along without too much effort. After a while, you notice that you’re sweating pretty hard. It gets harder and harder to catch your breath, and your heart is racing. What you might not have noticed is that your heart was beating pretty quickly the whole time. Should you be alarmed? Of course not. You’ll come to your senses soon and stop running. Your heart will continue to pound for a few minutes, and then it will slow down as you stand in front of the freezer trying to make a decision. But what would happen if you made it all the way through that well deserved bowl of ice cream and your heart was still pounding away like it was at the end of your run? You’d start to get concerned wouldn’t you? What was good during the run is not so good an hour later.
This illustration is pretty easy to understand, but for some reason, it’s harder for us to apply this same logic to the Real Estate market. “Oh no!” the newspapers scream, “we’re not selling as many houses in the fall as we did in the spring!” “Yes” we reply “and it’s colder at night than during the day.” In other words, that’s the way it’s supposed to work. What should really worry us is if the market never stopped to catch its breath. It would overheat just like that poor runner in our story.
Let’s look at the numbers.
Just like last year, the peak of our sales came in July. After that point, the number of properties sold each month started to decline. We fell a bit faster in August than we did in the same month last year, but we had a slightly stronger September this year than in 2013.
Our total sales volume for the third quarter of this year was almost identical to 2013. The combined total for the second and third quarters of this year beat the same period last year. So this is two years in a row with very robust growth.
The average sales price dipped slightly, but it is still well within the normal limits. Most of that had to do with volatility in the Ada County market. Canyon County actually saw a slight increase in value from the previous month.
The average days on market rose again, but it is still under 50. Anything under 60 is generally considered to be a quick market.
Since June, sellers have had to give up more and more in their negotiations in order to sell. They are now coming down 4.5% on average. This isn’t a huge figure, but it does show that balance is returning to the market.
Fewer new houses went on the market last month relative to the number of houses that sold. So on the one hand, while we might expect to see more houses on the market because it’s taking a little longer to sell them, we aren’t seeing a rush of new properties on the market on the other hand. In other words, the inventory levels aren’t increasing dramatically.
So we’re sitting down to a bowl of Tillamook Mudslide right now, and if things go like they did last year, we’ll have a bit of a nap through the winter before getting up early in the spring for another run.
Sellers: What Does This Mean?
- There’s a chance that things will continue to slow down through the rest of the year. Don’t waste time getting your house on the market. Do it now!
- Prices aren’t falling, but they aren’t going up either. Be realistic and expect to negotiate with an equal partner instead of telling them to take it or leave it.
Buyers: What Does This Mean?
- Don’t feel like you have to panic every time a new house comes on the market. Take a look at new listings, but now you have a minute to think before you act.
- There are fewer new houses coming on the market right now, so be flexible in the way you look at houses. Don’t get so locked into a particular dream that you can’t see the great house in front of you.
About Derek Cassel
As the Designated Broker & Lead Buyer Specialist at West Real Estate Group, Derek provides a wealth of knowledge with over 10 years of real estate experience. He has the ability to thoroughly explain any step of the process to new home buyers or seasoned buyers and will keep you constantly informed during the journey to homeownership.