Do you remember the analysis I put together in January of this year, looking at 2017 and comparing it to previous years? We’re now halfway through 2018; how is the market doing?
As in the past few years, you may have heard that we have a seller’s market, which means that we have less than 3 months of inventory available to buy (i.e., we have less houses for sale than would normally sell in 3 months). This is still true, but only in specific market segments. Depending on the price range, we could be in a seller’s market (marked in red), a balanced market (marked in purple), or a buyer’s market (marked in black). Let’s unpack that, shall we?
Overall, we have a balanced market across all segments. However, based on the price, the months of inventory available varies dramatically. We have a seller’s market until about $250,000, then we have a balanced market through $400,000, and then we have a buyer’s market. There are a few reasons for this change in market statistics:
- New construction is typically not available for the lower price ranges, which limits inventory.
- There are fewer people who are purchasing in higher price points, which limits the number of houses sold at those price points each year.
But, let’s also look at the market in the first half of 2017 compared with the first half of 2018.
Overall, we have seen a slight increase in homes that have sold from the first half of 2017 through the first half of 2018. However, at the edges of the market (lower priced and higher priced homes), this is not the case. At the lower end of the market, this can be caused by a combination of prices rising due to low inventory (and therefore buyers being unable to purchase) and interest rates rising. Above the $700,000 mark, we have fewer sales in general, so the percentage differences may be a bit deceptive. In addition, with higher interest rates, lumber costs, and lot prices, some of these buyers may be waiting to the side instead of upgrading. Finally, this can also be the harbinger of the market beginning to slow down overall, as this normally hits the higher priced market first.
What Does This Mean To Me?
Real estate markets are highly segmented. The state of your specific market depends heavily on your neighborhood (not even your town), the size of your house and the houses around you, and the condition of your home. While the numbers above may give you an idea of what to expect, if you are thinking about making a move, contact me, and we can discuss your situation in more detail, so you can either get the most money for selling your house or buy a new house for the right price (or both)!