I wanted to touch base with you today and give you a quick update on what has been happening in our real estate market. As you can imagine, we get asked about it quite frequently.
Over the past six to eight months, we’ve definitely seen a shift from a seller’s market to a buyer’s market in certain segments. One of the reasons for this shift is the fact that inventory is climbing. There are about 2,500 more active listings on the market this month than there were last year at this same time. In addition, interest rates have recently gone up and there’s a lot of talk about them continuing to rise in the next year. Finally, we have an extensive amount of builder product on the market.
We’ve recently gone through a pretty rough summer of red tide, which has caused some reluctance from buyers on pulling the trigger.
Not all price points are going to experience the same shift. Anything that’s appropriately priced from $300,000 or less is generally selling in under 60 days. There is still almost no inventory in this price point.
In the $400,000 to $700,000 price range, there are a significant amount of options for buyers. This happens to be where most of the builders are pricing as well. In addition to resale homes, there are plenty of builders offering incentivized programs.
In the luxury home market of $1 million and above, we’re also seeing a significant slowdown. This is primarily because a lot of investors would buy older homes for $700,000 to $900,000 over the last few years and turn them into $2 million to $3 million homes, resulting in a significant amount of choices for buyers in that upper market.
For home sellers, you need to be able to compete in both a price war and a beauty contest. You have to be one of the best looking homes on the market and priced appropriately in order to get your home to stand out from the competition.
For homebuyers, you should know that interest rates are starting to go up. Whenever these rates do go up, your buying power goes down. The good news is that there are a lot of options available right now and sellers are going to have to sharpen their pencils and lower their prices in order to get you to pick their property.
If you have any questions about the market or about real estate in general, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.