To be successful during the Summer Market, it all boils down to price. If you’re thinking of selling your Orange county home this summer, make sure you have a good strategy to position your house to sell in this changing market.
Many sellers are pushing the envelope in terms of price and are risking not finding success and wasting valuable market time.
The transition from the Spring Market to the Summer Market is underway. Seemingly, everybody has become accustom to multiple offers within days of placing the FOR SALE sign in the yard. With so many offers to purchase a home, a bidding war often arises. Reports of record prices swirl around neighborhoods. Many homeowners are tempted to join the fray.
Yet, the market has already started to shift. There aren’t as many multiple offers. Sellers who have stretched their asking prices above the most recent comparable pending and closed sales are sitting on the market without success. Can the shift between the Spring and Summer Markets really be that significant? The answer is a resounding YES.
It is not like the market suddenly transitioned into a buyer’s market. It’s more about supply and demand and carefully pricing a home. Housing is drifting away from a hot seller’s market and moving towards a slight seller’s market. The supply of homes on the market has been on the rise throughout the Spring Market. It has increased by nearly 1,300 homes since the end of February, a 29% rise.
The inventory will continue to grow until it peaks around mid-August. More and more homes will come on the market at a similar pace to the spring, yet many unsuccessful homeowners will accumulate on the active listing inventory. The inventory swells due to this accumulation of unsuccessful sellers. This occurs in every price range, not just the luxury end. In fact, during the Summer Market of 2016, homes between $500,000 and $750,000 had the largest increase compared to any other price range, growing by 18%. The second largest, a 13% increase occurred for homes priced between $750,000 and $1 million.
Demand, the number of homes placed into escrow within the prior month, rocketed upward since the beginning of the year and continued to rise until it reached a peak for 2017 at the beginning of May. During the Spring Market, it increased from 2,651 at the end of February until the May peak of 3,012 pending sales, a rise of 361, or 14%. Since reaching the peak, demand has actually dropped by 4% and sits at 2,904 homes today.
Due to all of the distractions of summer, demand slowly drops. It’s still the second hottest season of the year behind spring, but the shift can be felt within the real estate trenches. The housing market is simply not as robust. It is no longer at a fever pitch that produces instantaneous throngs of potential buyers the moment a home comes on the market.