A SHIFTING REAL ESTATE MARKET
The frenzied pace of our white-hot real estate market over the past two years has finally shifted into low gear, placing us in a less competitive, more balanced market for both Buyers and Sellers.
Home prices continue to increase but not at the hyperactive pace of previous years. Listings are finally beginning to increase but there is not an overabundance and Buyers do still outnumber inventory. That withstanding, we are trending toward conditions which favor Buyers as evidenced by the following:
- Presently, 30% of available inventory is in contract. In 2018 at this time, we were in a Sellers market with 50% of available inventory under contract. A “Seller’s market” exists when 40% of inventory is under contract; a “Buyer’s market", 25%.
- Price growth is decelerating; but not depreciating. Year-over-year price growth has slowed from 7-8% to 5%. In Marin County price growth remains stable at 6-7%.
- We are seeing days on the market beginning to rise.
- List price to sale price ratios are reflecting moderate discounts on active listings. The Marin LP:SP ratios reveal a slight downward trend, from 101% to 92%.
This decline in demand indicates that Buyers have more options and less competition as people are migrating out of California. Sellers are advised to prepare their home to compete with the increased inventory and to price it competitively at the outset. They may also consider adding enticements to attract Buyers.
Finally, Sellers could have more interested Buyers capable of purchasing their homes as a 30-year fixed mortgage slid last week to a new 12-month low of 4.37%. These historically low interest rates create opportunity for first-time home Buyers, trade-up Buyers, as well as Sellers who will most likely need to buy another house after selling their existing home.
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