September 2021 Market Update:

Fall is here and I don’t know about you, but it’s my favorite season! The cool weather starts setting in (although maybe a little bit too quickly this year!) and in some areas the leaves are already turning. So what’s that mean for the real estate market? 

Home Prices Making a Shift

This month is the first time all year that we have seen the average sales price decrease from month to month. But don’t be too alarmed - this happens every year around this time! As we mentioned last month, people get busy with the start of fall - adjusting to kids being back in school and rushing to get those last-minute outdoor projects they’ve put off all summer finished up before the cold weather really hits. What’s more important is that what we saw in terms of the list to sales price ratio - homes in September sold for an average of 2.7% under list price, which is much different than the 1-2% we’d been seeing people pay over list price for most of the year.  

Now this is just an average, so it’s not to say that no one is paying over list price anymore because that is certainly still happening and largely depends on the price range the home is in, but it’s just to say that we’re seeing a slight shift in this trend and it’s something to pay attention to especially as buyers making offers on properties which we’ll talk more about below. 

We’re also starting to see more price reductions, and for larger amounts - an indication that sellers’ expectations have not caught up with the reality of the market. The market had gotten so hot for a while there that sellers got in the habit of throwing any price they wanted on a property and having it sell - the low inventory and high number of buyers created the perfect conditions for this to happen. But now buyers are starting to pull back a little bit and be more concerned about overpaying for their home, however many sellers have still not made the adjustment so they’re coming on with crazy list prices and then having to lower them afterward. This is almost never the most successful strategy - time after time it’s proven that you actually net less money and it of course takes longer to sell in these scenarios. So our advice to sellers is to be realistic and in this market, we always say, there is really no such thing as underpricing your home because even if you do it’s just going to make for even more competition and will likely lead to multiple offers and drive it up to the price it’s truly worth in the current market anyway. 

Less Competition Makes for Big Opportunities

Many buyers have been looking for a new home for much, if not all, of the year. They’ve been missing out on homes they’ve fallen in love with, getting emotionally and physically tired of the home search and are understandably frustrated by it all! Many of those people get to this point of the year and decide to put their home search on hold for a while - they think waiting until spring will be best, a lot of the out-of-state buyers purchasing second homes or that had been thinking of moving their families may also decide to stay put for the winter. See there is a large misconception that the fall and winter are not good times to look for or buy a home - the inventory tends to be lower, people get preoccupied with upcoming holidays, it starts getting darker earlier and the cold and dreary weather don’t exactly make for the most motivating conditions to look at homes in. And while these things can be true, the reality is that fall and winter are the times of year to push through the mental and emotional fatigue and stay persistent in your search. Yes, there will likely be less inventory to choose from, but the fact that many people that you were previously competing with are taking a house hunting hiatus, means you now have less competition. So your chances of landing the home you love just dramatically increased!

Who You Hire Matters

As a buyer, it’s of course always important to have a knowledgeable and experienced agent to help you in your home search. It is however even more important when things start to cool off, that you have an agent that adapts and shifts with the market. Over the years, we’ve seen a lot of agents just get used to homes selling quickly and for at or above what someone is asking during the spring and summer months and they can get, for lack of a better word, lazy about doing their job. They may not be asking the listing agent the right questions or just assume that you need to pay full price to get a home because that’s what tends to happen during peak buying season. Knowing what’s going on in the current market as well as being willing to work hard, ask the right questions and truly negotiate on your behalf is something that we take very seriously

Just last week we put a home under contract with a buyer - the negotiations were long because we came in significantly under the listing price - the seller had been on the market for a while, hadn’t had any offers and comps told me that the house was worth well under what the sellers were asking. So I analyzed everything and came up with what I thought was fair for a starting offer, and of course the buyers agreed. It took days of negotiations and going back and forth with the listing agent and the sellers were not thrilled, but we ended up getting these buyers a very fair price for the property, what most would even call a “deal” in this market :) and they’re very happy which lets us know we’ve done our job. Bottom line is, you don’t want an agent that’s going to tell you you just need to pay full price because that’s what they’re used to people doing. You want an agent that’s never going to stop doing the work for you, no matter what market we’re in and one who knows how to create a logical and sound strategy that leads to a successful outcome for you. 

Note: There are still going to be many homes that generate multiple offers no matter the time of year and they will likely sell for at or above list price - this really depends on what you’re looking for and what price range you’re falling in. So I am not at all saying if you have an agent that tells you you need to offer full price that you automatically have a bad agent - you just want to make sure they’re doing their due diligence to come to that recommendation and are not just throwing it out there because “it’s what people do”. 

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For more insights into the market or if you want to learn more about what we do at Templeton Real Estate Group, reach out or call 802.488.3487.