Are you starting to see the market cool down at all yet?
The answer to that question is both yes and no. In part it depends upon the price range that you are looking in or are selling in. Our homes priced under $500,000 are still selling quite readily and often with multiple offers. However, the buyer pool is definitely smaller right now. And at the higher end, while offers are still being received, the pool is much smaller than it was a couple of months ago.
This does not mean that sellers are not doing well with their proceeds – they are. But if you are a buyer, what this means is that there is an opportunity for you to be able to buy a new home without having to compete with a dozen people. You may still be competing with a couple of other buyers. It’s still very important that you be fully preapproved for your home purchase so that you present yourself in the best possible light to the seller, but you have a much better chance of winning at this point in the year. So if you’ve been sitting on the fence waiting for a chance to buy a new home in a more manageable market, this would be that market. At this point we are definitely expecting another busy spring market so if you are hoping to buy, the fall market will be your very best opportunity to do so without the overwhelming crowds that a spring market brings.
If on the other hand you have been sitting on the fence hoping to see a downturn in the market so that you can jump in and get a buy, I wouldn’t hold your breath. There is absolutely nothing to suggest that we are going to see a downturn in our market. I have watched the market carefully for many many years now and just when I think that the housing prices are ridiculous and there has to be a softening coming, another selling season opens and prices are even higher. Excepting 2008, which there are no indicators to suggest will happen again in the near future, our prices continue to steadily climb (and even in 2008 we did not see a housing crash – we just remained stable for a year or two with no additional appreciation).
A home’s value is set by the market. Value is always determined by what a buyer is willing to pay for your home. Many factors come into play in setting that value. Market value reflects quantitative factors such as: # bedrooms, # bathrooms, # garages, placement of garages (attached or integral), lot configuration (large and functional back yard? Cliff lot?), location of the home generally, age of roof, age of mechanicals. Market value also reflects more qualitative items: how updated is your home, and is it all new, or just refreshed? What is the floorplan (open concept?) What are your wall colors? There is always a range that value will land in, which we call the range of reasonable. There is no ONE price at which a home will sell. If there are many buyers seeking a home like yours, it will sell at the top of the range of reasonable. If there are not, it will take longer to sell and may sell a bit lower in the range. What the market does not consider in setting a value of a home is what you need from the home. In 2008, many homeowners had used their homes as ATMs and withdrawn large sums of money for educations, vacations and cars. When the market softened, there was not enough equity for them to be able to sell their homes and not be in a short sale situation. This fact, that a homeowner over-extended themselves on mortgages, is not the least bit relevant to market value. The market is also not going to consider what you plan to do next. If you plan to move to Los Angeles to be closer to family and are finding that the Pittsburgh market is not going to yield you enough to be able to buy in L.A., you will need to turn to other investments to make up any difference.
We are in a very robust market – your home is far more likely to garner more now – whatever that may be – than it could have in the past. Forecasters are also suggesting that values will soften by year end. My crystal ball is out for service, but what I can tell you is that every hot market eventually softens. Waiting out the market so that you can get a price that the market is unprepared to deliver at this time may have you waiting many, many years, and during that time you may need to invest even more in your home in order to deliver to the market what it needs in order to deliver an acceptable sale to you.
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Office: 412-741-2200 x238