Low Inventory and A Sellers Market

For a few years now, you've heard how we are in a Sellers Market, on a national and local level. In this blog, I will share what all of this actually means and how you still need to be a smart seller in a sellers market.

Inventory Levels

It is a metric used by analysts and agents to monitor how their market is doing as far as the supply of homes for sale. It's merely a raw count of the number of properties being actively marketed and categorized as "active listings", think of inventory as the water level in a bathtub. It is all about supply & demand. In Northern Colorado, the inventory supply in September was only one month, meaning that all homes would be sold in a month if nothing new came on the market. Because home buyers are out in numbers, interest rates being the primary catalyst, homes are selling quickly = a sellers market.

A homeowner who reads this may think, I'll list my home for $50,000 overvalue and get it! That is not always the case in a strong sellers market. Why? Even with buyers out in numbers, they have a threshold and are working with a real estate agent who will provide comparables to properties they look at if doing their job correctly. For example, suppose you decide to slap a high price tag on your home. In that case, buyers will look for items like a new roof, updates, radon systems, finished basements, and other key features. When they walk into a home and immediately see it has an outdated kitchen, the numbers begin running through their head on what it would take to bring it up to their standards.

A high price tag, coupled with numerous projects needed, can equal more days on the market & price reductions. On the other hand, if you recognize some items need repaired or updating and price the home accordingly, it will sell fast many times with multiple offers, even resulting in over asking price! I recently had this situation, and we got $10,000 over the asking price in one day. It works.

If I could offer one tip (not because I am in the industry but because I have seen first hand the value) work with a licensed real estate agent. The market is too crazy right now to go it alone. Have an agent that knows how to run a quality Comparative Market Analysis (CMA) report for you. An accurate report should include comparables listed & sold, and it should look at appreciation in your area. I use a system that looks at currently listed, expired, and past sold, plus it includes an appreciation calculator. I give a range, not one specific price, because every seller has different goals and timelines. There is always what I call a "sweet spot" price, which 99% of the time the home sells for that price. Most agents will offer this service free of charge, which I do for all of my clients and friends, with no obligation.

There are many other factors that go into pricing a home for sale, this is a brief overview to give you a starting point. Let's chat if you have further questions on selling your home or to request a free CMA report, just email me at joannc@remax.net.