A Realtor, like an experienced Family Counselor, helps people manage expectations. August ushered in a shift in the Real Estate market where unmet expectations had everyone seeking counsel on why homes were sitting on the market longer. Sellers grew nervous about why they hadn’t gotten multiple offers and weren’t under contract during an expected time frame and looked to us to explain this change. While there is always a seasonal shift in the market, the trends we’re seeing now are actually creating a more balanced Real Estate market. Analyzing these changes has helped The Tomlin Team determine reasonable expectations and focus on how to best advise buyers and sellers.
Here are the signs that point to a more balanced market:
1. Inventory is increasing in almost all price ranges.
A low inventory situation which we’ve had over the last few years created more demand which drove prices up. Hungry sellers continued to challenge the market to see how much they could get. In multiple offer situations, homes often sold for more than their list price, thereby increasing the median sales prices of homes over time. An increase in home prices meant that a potential buyer with a median household income found it more difficult to find a median-priced home. Listing prices began having appraisal issues – where a lender’s valuation of the home came in less than the contracted sales price. Inventory has now increased with the supply of available homes rising 13.5 percent compared to a year ago, giving buyers more choices and creating less demand.
2. Days on the market are increasing.
As expected, when inventory increases, days on the market also increase. In Collin County, the average number of days a home is on the market compared to a year ago is up 6.7 percent to 32 days.
3. New listings are increasing.
Overall, new listings have increased 4.8 percent compared to last year. Jonna Fernandez, CCAR Chief Operating Officer, says, “Six months of inventory is considered a balanced market. At the beginning of this year, our inventory was only at 1.8 months (meaning the time it would take to sell the existing inventory if no new listings came on the market) – an extremely strong seller’s market. Seeing the supply of homes at 2.7 months is encouraging.”
Here’s how the market has affected the different price segments:
All price ranges below $400k continue to perform and remain in an inventory shortage, making it a seller’s market.
The $400-$500k segment has an increased inventory without a major jump in closings and is moving towards a balanced market.
The $700-$800k segment had a rush of new inventory with an average number of sales. This segment and price segments greater than it are a buyer’s market.
The good news is that the economy in North Texas is strong and continued growth is widely expected due to many key factors – thriving businesses, excellent school districts, fabulous shopping venues, a plethora of restaurants, and vast sports organizations.
How does The Tomlin Team, KW Frisco, respond to this shift when advising sellers?
1. Create a strong pricing strategy.
This is the most critical aspect in selling a home where buyers have many choices. There is always a correlation between days on the market and price. As your local market experts, we analyze market comparables, the condition of the home, and the location of the home to determine the ideal price range to suggest to our clients. When buyers have more choices, price, condition, and location become the deciding factors for their purchase.
2. Ensure that the home is well-prepared.
We offer the services of our Home Marketing Specialist who will do a walk-through before listing to offer suggestions for cleaning, decluttering, and furniture arrangement so that the great features of the home take center stage.
Professional listing photos are taken so that the features of the home are captured in the best lighting and at an accurate angle for digital marketing.
3. Ensure that the home is properly marketed in order to get the home in front of as many potential buyers as possible. Here are some of our marketing strategies:
Open Houses to get more foot traffic in the home
Agent tours to better introduce and keep your home in front of the market
Email blasts to keep the home “top of mind”
Phone calls to prospective buyers in our team’s personal network
4. Pay attention to changes in showing traffic and suggest price adjustments when necessary.
Having no showings is a strong indicator of overpricing.
Having many showings but no offers (or low offers) is an indication that the condition of the home isn’t comparable to those around it or that there is a problem with layout or location.
5. Alert buyers to Special Financing Options and incentives offered by our Preferred Lender to provide a smooth and stress-free closing.
By keeping up with market statistics, we’re able to guide a seller’s expectations so that they can be prepared to make the best decisions about getting their home sold. And, by being aware of current inventory and by having a keen knowledge of our DFW market, we’re able to assist buyers in finding their dream home. So, when you need valuable counsel regarding the sale or purchase of a home, we hope you’ll let The Tomlin Team Give YOU Our Home Team Advantage!