Ask a handful of realtors in the area, and most will agree that the market has slowed. It’s a feeling, a sluggishness in the air. But why? Interest rates are low, and lenders are promising that “they will be going up, it’s just a question of how soon.” That should be a strong motivating factor for buyers. And there are homes to choose from: inventory is more plentiful now than it was in the beginning of the year.
Speaking of inventory, here’s a snapshot of the current active listings across local towns:
I too, can feel a sense of slowing in our market, but it isn’t statistically obvious. I took a look at the data, year-to-date, and compared to Q1 through Q3 in the past two years. I also examined Q3 vs Q2 this year to see if there was a dramatic falling off. Here’s what I saw (please refer to the chart below): the market came back to life with a fervor in 2013 and we saw homes selling with only 9 days on the market in Danville (and 12 in Alamo). The days on market in the chart below represent the median average, and you must consider that in a truly hot market, the DOM will be a little longer for the most desirable properties because an offer date is set, and the home will be on the market for 7 to 10 days to give it the exposure before letting the offers roll in. A property with 10 days on the market may have received multiple offers in a bidding war situation, whereas a property with zero or 1 day on market accepted an early offer, often a pre-emptive. Bottom line, the column “DOM” does not represent any pertinent change since the numbers are similar enough.
By the way — for those agents fretting that the market is “slow,” they may want to think back to 2009, when the median DOM for the same three quarters was 78. Hel-LO. How soon we forget what sluggish feels like.
But I digress — back to my chart below, we can see that in both Alamo and Danville, prices have gone up steadily since 2013. That is evident in both the median sales price and the median price per sq foot. This year’s median ppsf is represented by one of my listings: www.61Bolla.com, a 2700 sq ft home that sold for $508/sf or $1,450,000 (with 6 offers). This home sold in September, so it falls in the recent Q3 statistics. Ironically, it was as I was putting together a multiple offer spreadsheet for my sellers that I first heard someone mention the slowing market.
Six buyers for one home that push the price more than $50,000 over asking is hardly describing a sluggish market. This house was priced right and staged beautifully, so it may have had a better experience on the market than most homes, but the fact remains that five eager buyers were still looking once this home went pending.
In Alamo, you can see the volume of home sales is down significantly so far this year–but that’s not the case in Danville. And in both towns, prices have climbed year over year. It’s all good news: for sellers, prices are strong and most homes are moving in relatively few days on market. For buyers, the low rates allow more buying power, and inventory has not yet dropped off for the holidays so there are plenty of homes to choose from. There is certainly no obvious reason for a sluggish market — both buyers and sellers can (and should) enjoy the great opportunity the current market is providing.