Welcome to Fall!
Steven Thomas, of Reports on Housing states:
"Every year the kids go back to school, the market changes.
- Homes take a little longer to sell.
- There are fewer showings.
- There are also fewer sellers coming on the market.
- Many sellers who were unsuccessful will pull their homes off of the market completely.
- Collectively, with both fewer sellers coming on the market and many sellers throwing in the towel, the active listing inventory drops for the remainder of the year, until it reaches a low on New Year’s Day.
Last year, from the end of August through the end of the year, the active listing inventory dropped 31%. Fewer homeowners pull the trigger and list their homes. As a result, the inventory falls as the year unwinds. The number of buyers in the marketplace drops as well. It’s much easier to move a family during the summer months when the kids are in transition from one school year to the next
With fewer homes coming on the market for the remainder of the year, that means there are fewer choices. This too contributes to a drop in demand. As a result, demand drops for the remainder of the year, until it hits a low on New Year’s Day. If you are keeping track, both demand and the listing inventory drop to their lowest levels on New Year’s Day. It’s not just a lack of demand; it’s also a lack of supply. Some buyers mistakenly think they can get a big “deal” during this time of the year, especially in November and December. The standard logical thinking sounds a bit like this: “If a homeowner has their home on the market during the holidays, they must be desperate.” It’s just not the case. We have been in an appreciating market for years now. Sellers simply want every dime they can get for their home, regardless of the time of year. And, for those buyers that are holding out for a major correction, there is not one on the horizon, not anytime soon. There are still not enough homes on the market and demand is HOT. With interest rates remaining below 4% and not looking to change much in the near future, Orange County will continue to experience a seller’s market. Janet Yellen, chair of the Federal Reserve, just last week stated that they are most likely going to increase the short term rate in December. In December last year, she foreshadowed that they were looking at increasing the rate four times in 2016; instead, it will only be one little change of a quarter percent and it won’t come until the very end of the year. These low interest rates are fueling the hot demand that we are experiencing today. Sellers need to be wary of the season as well. This is not the time of the year where buyers are willing to stretch that far beyond the most recent comparable sale. Overprice today and sellers will not find success for the remainder of the year. It’s that simple. It is the season where everybody is a bit more price sensitive. Price according to the most recent comparable pending and closed sales and most homes fly off the market, even during the Autumn and Holiday Markets."
-Source: Steven Thomas of The Orange County Housing Report
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