How Does a Market Change So Quickly?
I was talking with another Realtor today about our local real estate market. It seems like only a few short months ago it was a buyers’ market. In other words, a buyer could safely assume that they could make an offer on a home 10 or 12 percent under the listing price, and not offend the seller. Some homes were even sold with steeper discounts than 12 percent. In that market we had more sellers offering their homes for sale than we had buyers. Sellers were forced to take a little less than market price for their home, or risk the buyer just moving on and making an offer on another home.
Today we are definitely in a sellers’ market. The inventory of homes on the market has come way down, but we still have a good supply of buyers wanting to purchase homes. Now it’s the buyer who must step up to the plate. Especially in the under $400,000 market, our supply of homes is getting tight. We have had buyers make offers on homes only to discover the home is already under contract, or if not under contract, there are other offers on the same home.
I just ran the numbers in MLS. In Haywood County, we have only 347 homes on the market priced $400,000 and under. In the last 31 days, 82 homes in this price range have sold in Haywood County. That means we only have a 4.23 month supply of homes for sale in this price range. 3 years ago, we had almost a 3 year, or 36 month supply of homes on the market.
Ultimately, real estate is a supply and demand market. We have the demand, but not the supply. This has led to an increase in home prices. Also driving the consumer demand is interest rates. According to the Federal Reserve, we may have 2 or 3 more increases in the prime rate this year. Buyers are anxious to lock in lower rates, knowing the longer they wait, the higher the interest rates, and in turn, the higher their house payments.
So what does all this mean? If you are considering buying, do it quickly! If you are considering selling, it’s a great time to do so.
Come on down, we’ll leave the open sign on for you.