After 6 straight years of a solid real estate market here in the Dallas area, we agents are a little spoiled. Many believe the market is just going to continue booming and there’s nothing to worry about. But there also many real estate analysts who’ve been predicting a market shift from the seller side to the buyer side for some time now. Every cycle comes to an end sometime.
Here in the Keller Williams Allen, Tx office we’ve been talking about a shift for months now even though this was our best year ever. We’re already preparing for it in case it does become a reality. There are some signs out there that can’t be ignored, but we’re still not sure if the shift is upon us. Confused? Here’s why …
- We’re now almost into October and a normal slow down in activity is expected. Family community cities like Allen, Fairview, Lucas, Parker, Prosper, etc. are driven by the school year. That’s the #1 reason so many homes sell during the summer months and fewer homes sell in the off-season.
- Markets usually don’t turn quickly unless something extraordinary happens like the stock market and lender crash in late 2008. We might be in a subtle declining market for months and not know it.
Experienced agents watch our MLS very closely. Every day we see the new listings on the market, sale prices, expired listings, cancelled listings, and price reductions. When a home sells we look at the price and number of days the home was on the market. In fact, as I’m writing this, a notification came in on status changes for three different homes, in our area of specialization, one sale, one home went under contract, and there was one new listing.
So what makes me, and many of the agents in our office, believe something’s going on out there?
- The peak selling season this summer in the $250K to $400K in Allen was nowhere like last year and especially the year before. Two years ago we might put a home on the market in that price range and have 43 showings and 15 offers within the first two days. Everyone did, and those were just regular homes with regular finishout, not homes so special they really stood out. That was just the norm. Much of that was fueled by all the news of State Farm, Toyota, and Liberty Mutual moving into the area. This summer we didn’t see that. It wasn’t a depressed market, just a normal market. We might have 2-3 offers on a nice home within the first couple of weeks but some took months to sell. That wouldn’t have happened the year before.
- We’re used to seeing price reductions going into the Fall but we were seeing them this year even during the peak summer months. This year, almost all of our listings are taking at least one price drop to get them sold and some, two or three.
- Listings on average are taking longer to sell. Some sellers and the only proven cure for that is undertaking price reductions. But those sales are used as comparables for future home sales so it depresses the market prices.
So what does this all mean?
- A market shift may or may not be coming (or already started), but we probably won’t know until next summer.
- We are NOT in a down or depressed market. We’re simply back to normal. Reasonably priced homes will sell but homes where sellers are trying to hit the ball out of the park on pricing won’t.
- If buyers can’t make the deal on one home, they’ll just move on to the next. The buying frenzy days are over for now.
- Now is a good time to be buying a home. Many of these homes that have been listed through the summer months might have seen one, two or even more price drops by now, so there are some good deals out there.
- This is also a good time to have your home on the market. There are fewer buyers out there in the off season, but there are also fewer competing homes.
- Buyers are out looking at homes at this time are usually serious about doing something. They’re not just kicking tires like we see a lot of in Spring.
- The market should remain active until about a week or so before Thanksgiving and then we’ll probably see a slowdown through the holidays. I’ve driven to closings on ice in the dead of winter, so homes sell then too. It picks up again in mid-January depending on the weather and ramps up slowly every month after that through the summer.
- And finally, if Amazon moves to this area, that might change the entire dynamics. They will be bringing 50,000 jobs to whichever city they finally decide on and that would be a market shift “buster”.