Markets shift. Regardless of whether we’re discussing financial markets, commodities or in our case Real Estate – the one constant throughout all is change.
Most recently, the local and national real estate scene has enjoyed a cycle of increasing prices and fast moving inventory. Agents and clients alike have dealt with multiple offer situations across the board and homes have left the MLS almost as fast as they’ve been added. I say “enjoyed” because a seller’s market is generally viewed as a booming time in the real estate world. As a potential buyer however, it can create challenges as selection is limited, prices are elevated and most of the negotiating power favors the seller.
Noted real estate experts like Gary Keller of Keller Williams, are predicting that our current market dynamics may – or perhaps have already begun to – change.
Or in his words shift.
According to Gary there are indicators that when watched signal a downturn in the market. Today, total number of days inventory stays on the market is up, supply – especially at higher price points – is growing, some markets are seeing home pricing decreases and construction nationwide has been flat. Historically, it seems we’ve hit a peak.
“Only four times in U.S. history have home sales been higher, it’s a sign of a shift,” said Keller. In addition, “median home price is higher that it has ever been in the history of recorded time — last time we were here we were on the verge of a recession,” he said.
“It wouldn’t take much right now to push us into a buyer’s market.”
So – a shift may be on the horizon.
Fortunately, talk of market change and fluctuation is a constant at The Stephen Cooley Real Estate Group. We study trends and stay on top of conditions to ensure our clients always have the information they need to make the life changing decisions we advise them through. Listening to our founder and leader Stephen Cooley himself, it’s easy to see we’ve been here before.
The real estate market is cyclical. The severity of those cycles varies, but as stated before – it is almost always in a state of flux.
It is important to highlight the fact that all shifts are not equal. Nor do they have causality in common. The early 2000’s brought a major downturn to markets all over the nation due to largely financial factors. Bad loans, poor policy controls and other factors outside of real estate brought on foreclosures, devastating devaluation and the worst recession our nation had seen since the Great Depression. No one seems to be predicting anything like that headed our way. That being said, real estate experts – brokers, agents, realtors – need to be aware of the micro-markets that are created as a community begins to shift.
Micro-markets exist within overall communities. Think of it this way – when there are 12 homes for sale within a 10 mile radius, why do homes otherwise seemingly equal sell in a specific zone, when the others don’t. School desirability, access to amenities, commuting times and well planned neighborhoods all insulate against a shift. Even during our “Super-Shift” a few years ago there were homes that retained value and sold quickly. You could say they existed in a micro-market that retained its desirability.
So how do you as a potential buyer or seller decide what impact this may have on you? You can start by reaching out to someone that has 27 years of navigating these markets. Someone with a dedicated team of over 20 professionals whose only job is to serve their clients and know their territory. Someone backed by the strength of the world’s largest real estate company lending their knowledge, technology and resources.
Reach out to us.
And in the end understand that even as markets fluctuate, your dreams and goals do too. If you aspire to homeownership, crave bigger and better spaces, yearn for better schools or a shorter commute – those goals carry weight. Just like the stock market, most if not all players fail to forever properly time the market perfectly. Make a plan that takes you to your goal and let the trusted advisors in your life assist in making it happen. Worry less about the when, and more about the why.
I promise, this shift will at some point shift again.