Is the housing market cooling off?

In the beginning of July, I started noticing something that was almost unthinkable after almost two years - the housing market was starting to level out. This shift, or change, is resulting in homes staying on the market longer, recieving less offers and selling for closer to list price (or less than). At first, I thought this had to be a blip, so I started to network with fellow agents, chat about this change and the feedback I gathered further solidified my thoughts. Here's what I learened:

• The housing market isn't dropping out. Homes arent being sold for less money than they were a year ago or even two years ago. The homes that are on the market are being traded (bought and sold) for market value, as opposed to well above what they're actually worth. This plateau is likely a result of folks ability to vacaction, and a long bout of buyer fatigue coming to fruition. This, combined with more invenotry coming to the market as sellers become more comfortable with strangers coming in and out of their house has yeilded great results for buyers over the past few weeks.
• More houses equals less competition for buyers, but more competition for sellers. Rewind 3 months, when inventory was at historic lows, home buyers were fighting each other for the same 7 homes availible on the market. If there are 20 buyers in a market, and an average of 4 buyers added each week, that means that after the 7 homes have accepted an offer, the following week will result in 17 total buyers still looking for their new home ( 20 buyers minus 7 going under contract leaves 13 buyers from the original pool still looking. Then add 4 additional buyers the following week and you're about where the previous week started). With more homes on the market, this is allowing buyers to have more options and less competition - the buyers are spreading out, more buyers are landing an accepted offer and the buyer pool is suddenly less packed.
• Home prices aren't dropping, however seller are having a tougher time overpricing their home. This isn't to say that homes arent recieving multiple offers anymore - they are! Great homes in desireable neighborhoods are selling at the same pace with just as many offers as they have been for the past 18 months. Homes that are precieved as average while priced as fantastic, are starting to sit around on market. I call this time a plateau.
• In my person buisness, many of my buying clients, especially those that are fed up with the constant offer and rejection are choosing to wait. They're enjoying the remainder of their summer, getting outside or traveling. This mass exodus outside is resulting in less weekly shoppers. In short, folks are tired and taking a break. This is making for a great opportunity for those that are still shopping to increase their liklihood of getting an offer accepted.
• The Portland Metro and SW Washington housing markets are the markets that I'm most versed in. These are the housing markets that I study daily and chart trends for. This area is right at a plateau point, and many economists project another traffi increase beginning in September. With September approaching, we're preparing for stiff competition to return coupled by the traditional slow down of new inventory that is generally seen September - December of each year.

What does this mean if I need to sell my home?

• If you need to sell your home in the Portland Metro or Vancouver metro areas, this means that you'll need to do a bit more to get it ready for market. This also means that strategic pricing is key to the success of your sale. If you're planning on selling it's important that you release the best home to the market at a competitive price. This strategy will increase the liklihood of multiple offers and a higher price for you. My average conversion for listed homes is 1 offer per ever 12 showings. This means that in order to recieve 3 competing offers, at least 36 showings need to occur. While the average days on market as a whole has increased, remaining competitive will yeild the best results. Paint the house, clean the carpets, fix things that are instant eye-sores to buyers.
• If you're in a position that requires you selling your home and buying a new one in the area, contingnet offers are no longer out of the question. More and more contingent offers are being accepted as the days on market increase and the number of offers on a single home decrease. The scary thought of "where will I go when my home sells?" is no longer carrying as much of a burden and is becoming a more feasible plan forward.
• Aligning yourself with a competent, well verse agent is critical to this success. Your agent should have history in the markets you're buying and selling in and a track record of success. Agents know agents and this reputation is important as the relationships we build carry weight regarding the success of closing. All sellers want that ability to trust that the home will close without hiccups. Working with a local, reputible agent helps to establish this trust.

More questions that aren't addressed? Leave a comment, send me an email or schedule a consult on my website. We'd love to be an asset to your home buying and selling journey. How can we be of service?