With sales at 7 year highs and inventory at 7 year lows our current real estate market brings a new set of challenges for buyers and sellers. One of the biggest mistakes a buyer or seller can make is to act based on previous market conditions rather than current market conditions. Your success as a buyer or seller, or in dealing with a potential foreclosure on your home or condo, depends on knowing the correct actions to take based on today’s market. So let’s start by looking at where the market is before I tell you about a new way to get property info on your smartphone when you are out and see a house or condo that interests you, and why your property might be worth more than you think.
|Table of Contents|
|Statistics and Graphs|
|Sellers Approach to the Current Market|
|Buyers Approach to the Current Market|
|Mobile App to Get Info When Out Looking|
Statistics and Graphs
April is typically one of the strongest months for sales each year and this year was no exception. In fact, saw a dramatic increase over March and also last April and was the highest single month since the end of 2006. This is now the 16th consecutive month with sales higher than the same month in the previous year and also higher than the same month in all of the previous years back through 2007. Check it out on the graph below (click on the graph to see it full size):
As a result, the inventory levels hit another low last month and are definitely in the range where this can be called a seller’s market.
Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Apr 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.
This shows the current condition of our local market and this is what buyers and sellers need to know so that they take the correct actions.
Some sellers don’t realize that this is the current condition and, especially those who were underwater on their mortgages or those who were waiting for values to rise before selling, think that it still may not be a good time to sell. I added a post a short while ago that provides information about this for sellers who may be in this situation – Three Reasons Why Your Home or Condo Might Be Worth More Than You Think.
Some buyers don’t realize this and think that there are lots of choices and that they can still buy at well below market value prices, especially when it comes to short sales and foreclosures. But then they find out that any property that is listed at or below market value will go under contract often the same day it is listed and that short sales and foreclosures are selling very close to market value too. The only exceptions are properties which are in bad shape but those also are selling for market value for a property in that kind of condition.
The number of foreclosures have been dropping and I recently attended a seminar with a representative from Fannie Mae who works with short sales and has experience with their foreclosures department and he made it very clear that when determining the purchase price they will accept they look at market value and are no longer deeply discounting these properties. Of course this all depends on the condition of the property too. But one telling comment he made was that they do not refer to short sales as ‘distressed properties’ but rather a situation where there is a ‘distressed seller’.
From my experience you can get some reduction from the listing price on short sales and foreclosures but that is entirely dependent on their condition and how the market is doing in that specific area, and the amount of reduction may only be 5-8%
One more thing I’ve seen with sellers that I need to comment on is that some sellers have a misconception that due to this being a seller’s market that buyers will pay way above market value only to find out that their home or condo sits on the market with no offers coming in.
So how does a buyer or seller approach the current market.