The Real Estate market has shifted. Pricing has never been so important as in today’s market.
Homes listed today are staying on the market longer – especially on the Key.
Increase in listings means more competition. Anyone looking to sell his home now has to consider – “I’ve got to price it right.” The listing agent must focus on setting a compelling price.
Sellers who are pricing their homes too aggressively may end up selling just below their original prices and even below market value because the home lingers on the market for a longer period of time.
We have been living in an environment for several years where you could overprice a listing, and the market would catch up. You cannot overprice a listing and hope that the market catches up. You cannot hope that there are so many buyers that there is a bidding war and you will sell the house for more than list price.
Therefore, home sellers MUST BECOME more realistic in 2020. There are obvious signs of a slowing housing market. Seventy-seven percent of current listings will likely sell below the original list price in the first quarter of 2020.
Sellers who are pricing their homes too aggressively may end up selling just below their original prices and even below market value because the home lingers on the market for a longer period of time. Ninety-two percent that stay on the market two months or longer sold below list. On average, these homes sold for 1.5 percent less than the overall market.
There’s going to be some softening of appreciation in 2020. There will be more houses to sell, which is good news for Buyers. However, buying power will be affected because interest rates will rise.
Interest rates have gone down four weeks in a row — a three-month low. NAR Chief Economist Lawrence Yun stated in a podcast that mortgage rates have since fallen, providing a “second-chance opportunity“ for buyers. However, Interest rates are slated to rise — however, if the stock market drops, interest rates may also drop or stay steady.
Home prices have risen in excess of income growth over recent years which has left buyers frustrated. Home prices are up about 5 percent year over year.
Consumers may be upbeat about the economy, but that has not translated into a boost in home sales because incomes are not keeping pace with home appreciation.
High student loan debt over the past decade for over 400,000 young adults. Millenials are looking to purchase and settle in 2020.
The News and social media create doubt and tension. On the eve of Masters, a reporter asked Tiger, “What about the wind conditions tomorrow?” Tiger’s answer: “This is why I worry about wind. Wind can create doubt. Doubt can create tension, and tension can affect my golf swing. So, the wind doesn’t bother me. The doubt and the tension the wind creates might affect me.”
Sellers need to be prepared that we are now in a “Shift” in the marketplace. This means pricing is key now more than ever before. Homes will sell if Sellers are realistic in 2020 moving forward.
The Good News: Even with the Shift, we are still experiencing a healthy market.