The 2015 Spring market is upon us. And every home seller that I meet with is asking: Will Spring 2015 be like Spring 2014?
Last year’s Spring market felt frenzied. For the homeowners who were selling and receiving multiple offers that was fantastic! For those looking to buy homes in the neighborhood that was extremely frustrating. (See: How to Make Your Offer Stand Out in a Multiple Offer Scenario).
So was last Spring a fluke? Or, are we likely to see similar market conditions in 2015. Here is a snapshot of 2013 Spring compared to 2014 Spring. I always like to see what happened in the past to help give me a glimpse into what might happen next.
The screenshots below show a specific mapped section of TGS (this is not the entirety of the neighborhood). To be included as one of these data points, the home had to be priced above $125,000 with at least 3 bedrooms. Respective dates: January 1, 2013-July 31, 2013 and January 1, 2014-July 31,2014.
SOLD Data for TGS in 2013:
Price range: $125-$462,000
Total Sold: 39
Average Days on Market: 61
Average List Price to Sale Price Ratio: 96.18
Number of houses receiving 100% or more of asking: 11
SOLD Data for TGS in 2014:
Prices ranged from $130-$470,000
Total Sold: 46
Average Days on Market: 63
Average List Price to Sale Price Ratio: 97.98
Number of houses receiving 100% or more of asking: 15
Take aways: Prices seemed to have creeped up between 2013 and 2014. I was surprised to see that the average days on market was higher in 2014 than 2013. I looked a little closer at the CDOM and saw that there were two outliers in 2014 that racked up 248 days and 348 days on market. Removing those brought the CDOM for 2014 down to 52. There were more homes listed and sold in 2014 than 2013 but there were also more homes that sold ABOVE asking in 2014.
Predictions for Spring 2015: There will be fewer homes listed for sale. Many of the homes listed will be NEW rehabs not previously lived in by anyone else. Those homes matching the magic formula (3+beds, 2.5baths with Master Suite and 2 car garage) will sell for over $300,000+. That will keep resale prices on the higher end as well.
Sellers should not over-estimate what their home is worth. If sellers price according to market data, they are likely to receive multiple offers with good terms. If sellers try to out-perfom the market based on the low inventory, the buyers will move on. The home noted in 2014 that took 348 to sell was a great house. The ultimate buyer probably got it for 15k less than its nearst sold comp though. By the time the seller came to grips with the market data, the home was stigmatized. Had that seller priced at $239,900 out of the gate instead of $289,900, he would have received more than $215,000.
Buyers need to get their ducks in row now. Do your research. Get a good idea of what your price point buys in different areas. Make sure you are fully pre-approved and talk with your Buyer’s Agent about a strategy for submitting a contract in multiple offer situations. When you find the right house, be ready to make a good offer.