What a year it’s been in real estate. The year started strong for sellers as the trend in
price appreciation that closed out 2017 continued in to 2018. By the start of spring, the
market was in full swing with prices averaging 25% more than the same time the
previous year. Multiple bids as high as 20% over the initial list price seemed to be the
norm. Homes were selling quickly, often a week or two after hitting the market.
Then came the shift…
Despite statistics showing a favorable market for sellers through the Spring, those of us
who track the market every day felt a change taking place. Buyer sentiment seemed
different. There was more hesitancy to place offers and it seemed the attitude when
placing an offer was “if I get it, I get it” rather than a desire to get it any cost.
It wasn’t until mid-Summer that the market data revealed what we (in the business)
already knew. The price-to-list ratio steadily declined from 12% over list to 10%, then
7%, then 5%. The average price pulled back in similar fashion. And, perhaps most
interestingly, the number of homes sold changed very little even though a lot more
inventory came to the market. Whatever caused the change in buyer attitude (fatigue,
higher interest rates, affordability, etc.) led to a shift that continued into the Fall.
...and now it’s balanced
With Winter and the New Year approaching, the statistics now show a balanced
market. Final sales prices are about even (on average) to list prices. Average prices
are holding steady and number of homes for sale (inventory) are closer to historical
averages and twice as much as a year ago. The days on the market is back to 30 days
(from 17), which is another indication of a more balanced market.
Lessons from 2018
There are two key lessons from this past year. First, the market changes quickly and
secondly, constant monitoring is the only way to keep up with the changes. Remember,
your most reliable source for market information is from professionals like me who
watch this carefully. Getting information from almost any other source is either late or
written by somebody with only second-hand knowledge. Your real estate decisions are
too important and should not rely on those sources.