It is not a surprise at this point to anyone looking to buy or sell a home that the spring market is behind us. But every year at this time, many home sellers are surprised when their newly listed home doesn’t fly off the market at a sky-high price like their neighbor’s did in the early spring.
From late winter to early spring, the housing inventory is always especially low, and many buyers start their home search before most sellers decide to put their properties on the market. This triggers an imbalance in the market that leads to frenzied buying, bidding wars, and very quick home sales that are frequently over the asking price. I explained this in my Dec. 28 article, “List in the winter to get more money.” This year the annual trend persisted on a much greater scale due to the record-breaking snowfall, which significantly delayed listings. The total number of homes listed in February 2015 was down 34 percent from February 2014.
In early March, there were very few homes for sale and thousands of buyers waiting to buy. This created the lowest housing inventory in 13 years, a tremendous amount of pent-up demand, and one of the best times for home sellers to sell their property in more than 10 years. Through the spring, homeowners and listing agents relished in the leverage they had, and many elevated their realtors to superhero status! On the flip side, buyers and their agents have been extremely frustrated because they have had to compete with so many more people to purchase a home. The market from Boston to Worcester and from the North Shore to the South Shore has been sizzling since March.
Even though the market remains very active, we started to experience a shift in the past few weeks as more and more homes came on the market. This change usually occurs sometime in May, however, considering that everything was delayed by about a month this year, we did not really see it until early June. Overall, an increasing number of homes have been listed each week since early March. The overall number of homes for sale was scarcely increasing because properties were selling as fast as they came on the market in the beginning of March. From March to May 31 there were about 2,817 new homes listed for sale per week and 2,321 residential properties with pending sales. That left a net of 496 properties per week, which slowly but surely increased inventory.
This is a normal annual housing cycle, and sellers need to look at when their neighbor’s home was listed, and more important, the date the property went under agreement. If either occurred anytime between late February and mid-May, it is likely the home did not have much, or any, competition at all. A typical neighborhood had one home for sale in late February/March, and now that same neighborhood has at least a few properties competing for buyers. When buyers have a selection, they shop more leisurely and typically go for what they see as the best value. Now we are in a more balanced market with supply and demand. This is likely to continue through the summer.
A homeowner who needs to sell should be pragmatic and factor in the additional inventory when determining price.
If your home is already listed but it is not selling, the increase in competition is probably the reason. The only way to overcome this obstacle is for your property to have more perceived value than the others, either through price or amenities. It is tempting for sellers to blame their realtors if their home is not selling. In some cases it may be the sales agents’ fault, but in others it is not. As realtors, we tend to get more credit than we deserve when a home sells quickly and more blame than we deserve when it does not. It is the nature of the business.