Real Estate Ethics In Changing Markets
- Brian Brunson
- Mar 1, 2019
- 3 min read
These statistics reflect some feelings I've had since the first of the year. I believe they are worth discussing.
These stats were taken from the NAR's official MLS in our region. Boiling it down, the number of sold homes has decreased approximately 13% compared to last year. Considering the colder winter and the government shut down, that decrease may not reflect any significant market changes. However, looking at another factor - inventory, or homes available for sale - creates a stronger sense that change might be in the air. The number of homes for sale has increased approximately 20% compared to last year. In other words, we're starting to see early indicators in our market that suggest demand is waning, supply is gaining, and housing prices may be affected.
What Does This Mean?
For Buyers:
Be patient, but not too patient. Slow markets mean falling prices, and the market at the start of this year was slower than usual. If this trend continues, buyers can be braver in asking for a price reduction or for closing cost assistance. However, January last year was abnormally busy, so a "correction" in housing prices may be more minimal than the numbers suggest. If things turn upward again (as they almost always do in the spring) buyers will wish they bought now.
Also, make sure to take advantage of low interest rates. Rates have dropped significantly compared last quarter. A fraction of a percent in your interest rate could be the difference of tens of thousands of dollars over the life of your loan.
For Sellers:
Don't wait! For now it is just a mild slowing. If you wait, you risk the market slowing even more. At the same time, if you are really concerned about the price, it may be helpful to hold out to see what the warmer weather does to the market. I wouldn't wait past March though to put your home on the market. The market usually gets a good influx of buyers in the spring. Most economists I follow are predicting a more even year (if not a slight reduction in growth) from previous years. Sellers should seriously consider all offers.
What Is Your Objective?
Most of all, remember your primary objective. In the frenzy of changing markets, we often lose sight of what is most important. From my experience, the more you take money out of the equation, the more you get at the root of your true housing priorities. Usually it involves family - their stability, protection, and quality of life. Often it involves hopes, aspirations, and newness of life - the American Dream. Often, the timing is more critical than the dollar amount. And looking back, few people pay much attention to the difference of a few dollars when compared to the rest. That's not to say finances should be ignored, but they are almost always secondary.
For buyers, the most important financial objective is AFFORDABILITY. If you can afford it, and it meets your needs, move forward with confidence. For sellers, you have the opportunity to help another person or family with the same hopes and dreams you once had. Remember, you were in the buyers' shoes once.
If we get caught up in trying to maximize our economic gain by timing the market fluctuations, we miss out on something that matters more. I see this more often than I would like. In all transactions, we need to stop looking for the "killer deal" or the "best deal" and be content with a FAIR deal. We may forget there is another party on the other side of the transaction with a story of their own. People talk a lot about road rage, but rarely think about "house rage". It often becomes all about making or saving the most amount of money possible, with little consideration for the other people on the "road." In the Scriptures the Lord tells us that when we get a new coat, we should give our old coat to someone in need. Most of us cannot afford to give our old home to someone in need, but as sellers, perhaps we can be more mindful of the needs of the buyers. As buyers, we can be aware that something may have happened in the sellers' lives (which is often difficult) that requires them to make a big change.
Bottom Line:
Changes in the market can be incredibly impactful on homeowners, especially in money matters. These matters are important. We are starting to see indicators that the growth in housing prices may be slowing. But if you are looking to buy or sell a home, remember, don't let the money matters distract you from what really matters!
Brian Brunson, Broker
HomeTowne Real Estate, Inc.
801-592-4840
Commentaires