January Market Update - It's Go Time!
Published | Written by Pamela Briggs
With the holidays in the rearview mirror, the Tri-County housing market is revving its massive engine.
Getting Hot: Strong demand and a low supply of available homes is allowing the market to accelerate fast.
It is GO TIME!! The 2020 housing market is already looking a lot like a drag race. The green light just went on and the market is already propelling down the racetrack at an amazing speed. It was just a year ago that housing was moving along at a much slower pace. Buyers were taking their time and it definitely was not a race to purchase. Mortgage rates were at 4.5%, eating into a buyer’s motivation to find a home.
Fast forward a year later and there is no lingering inventory from the prior year. Interest rates are at 3.75%. The low interest rate environment is the rocket fuel that is propelling the market down the dragstrip. Multiple offers are once again the norm. Homes that are priced well and in good condition are selling quickly. In most cases it is the winning bidder who finds success.
Everything priced at market value (not overpriced) and below $750,000 is experiencing a Seller’s Market. It all boils down to supply and demand. Current demand is extremely strong, and the active inventory is at exceptionally anemic levels. Compared to last year, there are 33% fewer homes on the market right now, and demand (new pending sales over the prior month) is up by 15%.
The expected market time (the time it would take to list a home today and then place it into escrow down the road) dropped from 80 days two weeks ago to 74 days today. This is because the supply of homes increased by only 352 homes, up 4%, while demand exploded upward, adding an extra 405 pending sales, up 13%.
The only thing holding back demand right now is that it is only January and not that many homes are coming on the market. Even in California it is still winter. Demand will continue to climb as more and more homes come on the market, peaking between April and May. Sellers who opt to sell now, versus waiting until later in the spring, are taking advantage of a market ripe for the pickings. Carefully pricing a home according to its Fair Market Value, taking into consideration condition, location, and upgrades, will result in selling quickly and at, or even slightly higher, than the asking price. Stretching the price too much will result in wasting the most valuable market time, the first few weeks after coming on the market.
For homeowners waiting to place their homes on the market in the spring, there will unquestionably be more buyers looking to purchase; however, there will also be a significant increase in the number of sellers coming on the market. The Expected Market Time typically starts to rise in April as the number of new FOR SALE signs outpaces the rise in demand. One thing is for certain, right now is a really good time to place a home on the market, just as the housing market is putting the “pedal to the metal.”
If you have questions or would like to discuss a plan for your home, please contact us today via text or call at 909-631-0006. We look forward to hearing from you!