My Caveat To This Article
All real estate is local. Fairview, Lucas, and Parker are my areas of specialty and I know this market very well however, what applies here may or may not be what other agents are seeing in other areas of the Dallas Fort Worth Metroplex. Please take that into consideration as I share this article with you.
What A “Normal” Selling Season Looks Like
Buyers tend to look early and buy later in the season. Many wait until after their kids are out of school and they’ve taken a family vacation in early June to start the process. They believe they’ll have plenty of time to buy and sell over the summer months. Others don’t want to risk buying too early in the season fearing a home they might like better could come onto the market later. To add to that, it’s also usually scorching hot in August and that deters Buyers from wanting to get out and look at homes. So in general, we’re used to seeing a slow start in February then the activity ramps up gradually through August, then begins to slow down.
What We’re Experiencing Right Now
We currently have 26 homes and lots in title worth $14 MM. About half of those homes are our listings and the other half are other agent’s listings in which we’re representing the buyers. In addition to this, we’ve already sold about $4 million this year. Many agents consider Easter weekend to be the beginning of the selling season but we’re already working at our “summertime” pace. Of course, we’re thrilled to be coming out of the gate with this kind of activity but something very similar to this occurred a couple of years ago and what happened later in the year surprised us.
What Does It Mean For The Rest of the Year?
Honestly, I have no idea if this strong activity in the first quarter is going to continue and there’s a reason I’m being cautious. Two years ago at about this same time, we also had a very strong first quarter. We naturally assumed that would translate into a really exceptional year overall. We were in for a big surprise. The market actually softened in June through August, just when it should have been at its peak. We weren’t the only ones noticing this either. All of our KW Allen team leaders told me they were seeing the exact same thing.
When homes are languishing on the market during summer with few showings or offers it worries agents. Many thought that was the first sign the dreaded market shift so many “real estate experts” had been talking about had started. We even started preparing for it here at KW. Fortunately, that wasn’t the case, but how could the year start off so strong and then slow down? Just the opposite of what we’re used to and with no apparent reason? Here’s what I think happened.
For whatever reason, the buyers were out in force earlier in the year than normal. There was a lot of confidence in the economic sector and maybe that spurred buyers to start looking earlier in the year for their home. And just like now, the inventory of available homes was low. When you combine low inventory with an ample supply of Buyers it always leads to a competitive market. Homes tend to sell quickly and sometimes with multiple offers. It’s all about supply and demand. We thought the table was being set for a fantastic summer, but it never happened.
By the time Summer rolled around, the homes that had been listed earlier in the year and never sold were also competing with the new listings just hitting the market. There were lots of homes to choose from. The buyers saw it happening. They believed there was no rush to make a buying decision and they were right. There was no sense of urgency to make their move on a home. It became a Buyer’s market.
I made a mental note back then to remember what happened in case I saw it again. Hot markets rarely sustain themselves for long periods of time. The market tends to gets hot, then cools off, and then might even heat up again. It’s impossible to predict when these buying periods will occur and how long they’ll last. But there are two things I’m sure of …
- There’s only a finite number of Buyers every year wanting to buy a home in any given area.
- Timing is everything in real estate and as a seller you want your home in the mix when the market’s hot.
We always like to have our listings on the market throughout the entire six golden selling months of March through August. That way, we don’t have to try to outguess when the market really heats up. The surge may happen early, middle, or late in the season (or combinations thereof), but we know for sure our listings will be seen whenever it occurs.
I’m looking forward to re-reading this posting in September. I’ll know by then how the year turned out and if my concerns were valid. Hopefully this strong early activity is a positive harbinger of a really special year ahead for our clients and us.