This year has brought steady improvements in the real estate market. Prices rose driven by lower inventory in many markets, and consumers remained relatively optimistic about the economy and its direction—an encouraging indicator for real estate. While the long-anticipated increase in interest rates will likely occur in late 2016 or early 2017, a number of positive signs point to a balanced market with benefits for both homebuyers and sellers in the next year. For example, an increased supply of inventory and slightly more transactions are expected in late 2016 and on into 2017. Home prices are forecasted to see more modest increases, with some markets still facing bidding wars while other see slight price drops or fairly flat prices.
What is a “Balanced” Real Estate Market?
Statistically speaking there are 2 ways to describe a balanced market,
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It is a market where home are taking an average of 90 – 180 days (3 to 6 months) to sell or a market where 40% to 60% of new listings in any given month sell.
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In our market balance is going to look more like 30-60 days on market and annual appreciation of 3-5%
Both definitions boil down to how quickly the inventory (all the homes for sale) is getting sold.
Home Prices in a balanced market tend to increase slowly and steadily, some time appearing flat.
Balanced Real Estate Markets
When markets are balanced. Typically, interest rates are affordable and the number of buyers and sellers in the marketplace are equalized. The scales don't tip in either direction, meaning the market is normal without experiencing volatile swings.
Signs of a Balanced Market
One important note is an overall balanced market is really composed of several various markets, like this image of some teeter totters. Some areas or neighborhoods may be experiencing down markets while others are up (HOT!) but overall the market (or teeter totters) average out to a balanced line.
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Tips for Buying and Selling:
So more balance is a good thing, but you still need to know how to navigate the changing real estate market.
- Don’t wait to buy. If you’re ready to move and you’ve found the house, jump on it. Mortgage interest rates are predicted to rise above 5% in 2017.
- Closing quickly will be important. With volume still low and prices slowly rising, sellers aren’t as desperate to sell their homes, but you have to compete with other buyers.
- Make a realistic offer on a house. There’s enough demand that the seller won’t be desperate to take whatever you offer, so research and let your agent be the expert.
- Remodeling could be a good idea. Some modest improvements could significantly boost your home’s value. Brokers can help spot hidden gems.
- Accurately price your home the first time. It doesn’t matter what you think or feel your home is worth or how much you’ve put into it. Buyers are more educated these days; don’t waste your time or theirs by fighting for an unrealistic price. Ultimately, all that matters is what the home appraises for.
A Great Way To Stay Up To Date
The Market Snapshot is a great way for buyers and sellers to get informed and stay informed about the real estate market. Buyers can keep an eye on the areas they want to move to. Sellers can see every comparable sale in their neighborhood as they prepare to sell their home. Market Snapshot will come directly to your inbox on the schedule you choose, and best of all, it's FREE!
Posted by Cary W Porter on
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