Guest post by Dan Metcalf.
Over the next several months, we’ll be rolling out a new feature, “Source Neighborhoods,” which will unpack the communities in which we live, outlining their boundaries, community resources, and, in particular, local real estate markets.
Beginning in a week or two, we’ll start bopping from neighborhood to neighborhood, looking at what makes each pocket of our community unique and the sorts of opportunities for housing and recreation they offer. Today we’ll be looking at our market generally—look forward to a more granular level of detail in the weeks to come!
In the anything-but-normal year that has been 2016-2017, one thing that has been on a fairly even keel is the real estate market in Source of the Spring’s coverage area. Here, homes that are priced appropriately and present well sell within days; those that are not, take weeks to months and generally sell after price reductions.
Sounds like a normal market, right? And it is. But go back in time, or look around in our country, and in some times and places there’s just no such thing as a quick sale—or a sale at the asking price or above. Digging a little deeper, we have basically three factors to thank:
- Low Inventory of homes has a little on the lower side, for approximately four years or so. Possible causes of this include some homeowners feeling that appreciation has just finally offset their transaction costs and restored their equity.
- Extremely low interest rates of the past four years or so has meant that many homeowners have been able to refinance, often lowering their monthly payments, as they have locked in as low as 3.5 percent. A second impact is that these low rates have lowered the costs of borrowing more money, keeping monthly payments lower at higher purchase prices than in higher-rate periods. This has allowed values to rebound and, feeding back into the first point, low inventory, many homeowners now have relatively low payments, especially in the context of the value/equity gains they have seen. Not seeing affordable options to entice them to move, and often loving where they live, many of these sellers then simply renovate or expand their current homes rather than put them on the market.
- A stable jobs base has allowed for our markets to keep humming along, though the uncertainties introduced by the current administration have meant some trepidation at either end of the buyer pool. First-time homebuyers, many of whom have had relatively variable employment, are hesitating since they feel their departments or projects may be shuttered. Upper-end buyers, who may have anticipated at least job security under a Clinton administration, may not have felt that this was the year for a major purchase.
On the ground what this has meant is that, while it may appear that all the houses sell quickly, that often because those that are noticeable get attention and bought up in short order, often with multiple offers. In 2017 this broker saw a marked shift from multiple-offer situations resulting in mild escalations in the first quarter, to really aggressive bidding in the second quarter, and significant tapering as we headed into the classic August slump.
The weeks to come will be interesting to see, as most years—especially when rates remain favorable, as they have for now—our autumn market picks up just after the Labor Day holiday and folks return from vacations, to school, and to “real” life. Updates to come!
Dan Metcalf is a real estate agent with Finn Family Group.