Welcome to the Fall Sales Season!
Bargains for Buyers and Decisions for Sellers
One word summarizes post-Labor Day real estate markets: motivation. Sellers are motivated to get their deals done by the holidays or risk waiting until the spring season. Buyers are motivated by a temporary reduction in competition and the prospect of bargains. First frost and turning leaves remind both sellers and buyers that time is short to close sales before the year ends.
Traditionally, the fall season begins with a significant decline of buyers. According to National Association of Realtors home buying statistics, about one-third of home buyers are families with children under 18, and most of these try to close on their new homes before the opening of the school year.
This year, the outlook for fall sales is especially depressing. After a strong start in the first half of the year, record low inventories depressed sales in the summer months. Short supplies are inflating prices and many buyers, both first-time buyers and move-up buyers, can’t find homes to buy that they can afford. As a result, the National Association of Realtors has lowered its projected sales increase for 2017 from 3.5 percent earlier this year to just 0.7 percent, with most of the decline forecasted to take place in the second half of the year. Hurricanes Harvey and Irma devastated housing markets in two of the nation’s largest states, Texas and Florida, making the sales outlook even bleaker.
Decision-making Time for Sellers
Despite the inventory shortages, a certain percentage of listings linger on local markets because they are overpriced, have condition issues, haven’t been marketed properly or just don’t appeal to today’s buyers. Overall, unsold inventory is ever lowered this season than last, but demand for homes varies greatly by price tier. For example, homes priced over $500,000 are taking an average of 164 days to sell, far longer than the median of 30 days for all homes.
For sellers whose homes are still lacking a contract after 90 days or more on market, fall is decision time. Unless they get very lucky, chances are excellent that their fortunes won’t change unless they take action. Their options are to take the house off the market and address any conditions issues that may be turning off buyers, or consider lowering the price. Both of these options have a silver lining. Real estate listing sites like Homes.com will push out emails to local interested buyers when owners change prices or relist their homes. If homes are delisted for more than a month, most multiple listing services or MLSs will consider them new listings and promote them as such.
Thinking about reducing the price of your listing? First, ask your real estate agent for an updated competitive market analysis (CMA) that includes recent sales of comparable homes to get a fresh picture of your local market. Work with your agent to select a price that will reach the most searches, yet one you can afford.
Even if you don’t reprice, here are some tips on freshening up your listing:
- The chances are that over the summer prices in your market rose. Use the findings from your agent’s CMA to make the point in your listing’s notes that your home is under market price.
- Review your listing on every major site, including your MLS and your broker’s site to make sure all data is current.
- Have new photos taken after the leaves turn color to show curbside views and fall glory. Decorate your interiors for the season. Add a fire in the fireplace and bouquets of mums and gourds on the table.
Bargain Hunting Time for Buyers
Today’s tight inventories make it tough for fall buyers. New listings will dry up to a trickle in the fall, and aging ones will be picked over. However, in every market, there are still diamonds in the rough. These are properties with a flaw or two that have turned off buyers but could be fixable, especially if the seller is motivated enough to lower the price to cover renovation costs. Even in today’s sellers’ markets, fall is a good time to make a lowball offer on a property that has lingered on the market for more than 30Ask your real estate agent to make a new virtual tour to show off the new photos. Top tour providers will distribute the tour directly to YouTube, which will generate more traffic to your listing.
Most markets today are sellers’ markets, and bargain-hunting buyers need to work hard, beginning by poring over Homes.com listings in several price tiers in each zip code and driving each area to get a feel for the neighborhoods.
Here tips for fall buyers:
- Subscribe to your MLS and brokers’ sites as well as Homes.com and make sure you register to receive email notices of new listings or re-pricings in the zip codes you are monitoring.
- Consider increasing your geographic hunting ground to increase your choices of finding the right property.
- Drive by “coming soon” listings that aren’t yet listed and call your prospects as soon as they are available.
- It should go without saying that you must be pre-approved and ready to make a contract offer quickly even if the competition is lighter in the fall months.
- There could be a very good reason that an attractively priced home hasn’t sold. Bring along your real estate agent to make sure the seller is making a full disclosure of defects that could affect the value of the home such as leaks, mold or faulty insulation. ALWAYS insist on a 30-day cancellation clause in any contract to give yourself time to have a complete inspection, including radon and pest damage.
As the temperature drops and the holidays grow near, pay closer attention to the calendar. With the arrival of Thanksgiving, housing markets will change again. As the holiday season kicks in, inventories will fall even more as many sellers call it a year and pull their listings. With even fewer homes to choose from, most buyers put house hunting on hold until the upcoming spring. If you’re hoping to buy or sell in the fall market, make every day in October and November count.