Signs of Market Shifting From Sellers to Buyers
Is Home buyer relief in sight? Yes, interest rates may be higher, but asking prices are scaling back a little. Almost 20% of listings in Chicago saw a price cut averaging 2.7% in a recent survey. In the Washington, D.C., metro area, 15.4% of all listings had price reductions that averaged 2.5%, and 14% across the USA saw a price reduction during June. The rate of reductions was higher than it’s been in some markets for years. In Seattle, 12% of listings got a price reduction in June, the highest percentage since 2014. The median cut was 3.1%
California prices also so a decrease in pricing. Year over year we see that homes, on average, sold for less than what they listed for. 38 percent of homes sold had a price reduction, granted it was a nominal 4% in reduction, it is still a new factor showing that buyers have an advantage now.
The key to getting these reductions is to negotiate. Having your own representation rather than just dealing with the listing agent is the best way to make this happen.
The number of homes sold in Southern California dropped dramatically in June for the first time in years and the number of those applying for a mortgage has dropped as well. This weakening in demand despite an increase in inventory is due to a drop in foreign investment and buyers being tired of the frequent outbidding we saw in early 2018.
The result is fewer buyers shopping, homes taking longer to sell and frequent price reductions. All of these signs are indicators of a shift to a buyers market. Buyers are starting to see more options, more sensible pricing and best of all, less competition when it comes to making offers.
Buyers should take advantage of this new spike in property choices and a new willingness to negotiate by sellers while interest rates are still low. WARNING: an interest rate hike is rumored to come in September.
While interest rates only go up by fractions of a percent, when applied to a large purchase like a home it could equate to hundreds of dollars per month and more income to even qualify for the same loan. This chart released today from the California Association of Realtors details just how much it could go up. Numbers are applied to the Median average CA home price.
For more information about the housing market in Southern California, feel free to contact me direct.
MORE ARTICLES
Michael Robleto
REALTOR®-Compass Real Estate
213-595-4720
michael.robleto@compass.com
Michael Robleto is a Pasadena based REALTOR®. His analytical and open approach to sales and representation have served his clients well in his twenty years of sales experience. Michael is a staunch homeowner advocate that blends compassion with a highly advanced technology-driven approach to the buying and selling of real estate in and around Los Angeles. His client accolades of insight, integrity and hard work support the fact that he is not your average agent.
Michael leverages his personal passion for historic architecture to provide his clients the unknown insight on the pros and cons of older homes. Michael, a California native, grew up in an older Bungalow home and has spent 23 years in Southern California admiring the unique architecture of the region. He often writes on homeownership strategy, historic residential architecture and Pasadena related topics which can be found on Facebook, YouTube, Twitter and Instagram under the common profile name of his blog; BungalowAgent or at www.BunaglowAgent.com/blog.
Michael is a committee member and frequent volunteer for the preservation efforts of Pasadena Heritage as well as a supporter of the Five Acres center for children.