Nov. 15, 2014
Tapping the Breaks
Driving back down from McCall is never as much fun as driving up there. Mostly that's because what you're planning to do in McCall is more fun than what you'll be doing when you get back down to the Valley. But part of it is that there is at least one good downhill section of the road that always makes you think about your breaks. You notice the signs as you drive along telling you that a lengthy descent is coming. As you come to it, your foot comes off the gas and you start to coast. If you really want to save every drop of gas, you put the vehicle in neutral. It doesn't take long to pick up speed. Before you know it, you're racing along faster than you feel comfortable and your foot begins to move to the brake pedal. At that moment (if you're a little strange like me) as your foot hovers over the pedal briefly, you wonder if the breaks will engage when you put your foot down. As you've been racing down the hill, have you been safe because you can slow your descent or have you been in free fall the whole time and just didn't know how much danger you were in? Obviously the fact that you're reading this means that the brakes have always worked for you. That's good news of course! The rest of the good news is that our Real Estate market has brakes as well, and they seem to be working perfectly. Let's look at the numbers.
The first and probably most significant "tapping of the brakes" is that the total number of houses to sell stayed the same from September to October. That's huge as all of the warning signs for this time of year tell us that we should be on a steady decline.
The average sales price also remained roughly level.
The average days to sell a house rose moderately. This in line with what we saw last winter when it reached its peak in February.
The other major indicator that shows us that the market is not in free fall is the amount of negotiations for existing homes. Sellers have been giving up a little bit more (and sometime a lot more) each month in order to get their houses to sell. Last month, the sellers fought back and actually had to yield less than the month before.
Most likely, the major reason that the sellers could negotiate a little harder is the falling inventory. For the last several months we have had fewer and fewer new listings come on the market to replace those that have sold. Last month, we reached that magical moment when we actually had more sales than new listings.
In summary, while we expect that the market will continue to slow as it normally does at this time of year, it's good to see that we aren't in free fall (or dare I say having a bubble burst). The market is still acting rationally. If there are fewer houses on the market, some power will shift back to the sellers' side.
Advice for Sellers
- While the market isn't quite as strong as it was this past summer, it is by no means sluggish. List your house now before everyone else does in January.
Advice for Buyers
- Realize that most sellers who list in the winter have some motivation to do so and aren't just "testing the waters". Take advantage of that motivation.
- Be realistic about what the market is doing and don't low ball the seller when you find the right house. Chances are, they don't have to deal with an unrealistic offer.