For the past decade or so, it’s been relatively a seasonal market dynamic in real estate. I would say consistent. We know when it’s going to be busy and when to possibly plan for some time off/away from the business.
Not many sellers put their homes on the market during the holiday season at the end of the year, and as spring approaches, we see more inventory and more buyers in the market. During the summer months, inventory increases as does the “days on market,” as many buyers take a summer break with their families and enjoy vacation time.
Inventory increases and has been the highest from August to September. However, since the pandemic began, most of the historical cycles have been out of whack in a sense.
This year, we’ve experienced a slow start to the “spring selling season,” as it were. I experienced many buyers waiting for mortgage interest rates to adjust/lower before they stepped into the market.
Since then, we’ve had very strong weeks of multiple offers and then very slow weeks where we’re looking around asking other professionals in the industry, where did the buyers go?
As an example, there were two homes in a local area that sat on the market for about 6 weeks. The price and condition were in line with comparable sold homes. Right before Memorial Day weekend, both homes went pending within a day of each other with multiple offers — like out of nowhere!
In Contra Costa County, I’m seeing the days on market increase over the past couple of weeks (averaging about 25+ days on market) and the number of price reductions increase as well (upwards of 25% of listings).
There could be two factors at play with these increases. More sellers have finally prepared their homes for sale; realtors are listing homes based on sold comparables over the past few months; and homebuyers are taking a break and going out of town for now.
According to this graphic, it is still considered a “Strong Sellers’ Market”, however it does feel like prices are and may need to come down a bit as the active homebuyers are realizing the cost of buying a new home remains fairly high for their budget (interest rate and homeowner’s insurance).
I have found that buyers are more patient and focused on waiting for the right house and then standing firm on what they’re willing to offer. This becomes truer as inventory increases and sellers have to adjust more competition.
It will be interesting to watch this week as I host more open houses and hear directly from buyers, neighbors and other realtors about what they are experiencing as the summer selling season warms up.
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