Category Archives: Buyers

December Continues to Empower Buyers

Last month we covered the market updates that indicated that buyers are becoming more powerful in the current real estate market. This month we see a continuation of that trend. Here’s the update:

* Note: Information presented here is deemed to be reliable, but is not guaranteed!

AvgSaleListPrice

 

Average and Median Sale and List Price
While the Active Average and Median List Prices are still on the rise, Pended and Sold Average and Median List Prices continued to slip. We’ll put that into context in a moment…

ListingInventory

Listing Inventory
Listing Inventory has been dropping since September, which would suggest that buyers have fewer options. Normally, reduced supply would coincide with increased prices, but guess what: we actually have fewer interested buyers. I’ll make that case soon…

DaysOnMarketDays on Market
How long does a listing stay on the market when Sellers have the control? Not long. We’re still doing much better than back in February of last year, but we’re creeping up. With Average Days on Market of 80.9 and Cumulative Days on Market of 88.1, sellers need to make a better base to move their properties. The “Cumulative” is what matters.

SaleToListRatio

Sale to List Price Ratio
This is where the case is most clearly demonstrated: While the Sale to List Price Ratio is up (97.6%), the Sale to Original List Price Ratio continued down, yet again, to 94.5%. That’s right: the average reduction in sale price from the original list price was 5.5%. If you were looking at a $200,000 property, you’d stand a decent chance of making it “home” for $189k.

Summary
Even with fewer properties competing for your attention, Sellers are giving more at the closing table to get out of the market.

Are you feeling a little more powerful now? I hope so :).

 

Powerful Metrics for Home Buyers

There’s a lot of power in knowing what others are doing in the current real estate market. Two import metrics that I watch are “Sale to List Price Ratio”  and “Days on Market”. These can help to gauge the temperature of the real estate market and help buyers and sellers to prepare for contract negotiations. If you know how much others are haggling on their contract negotiations, you have a better sense of how far you might be able to go as a buyer to reduce the list price. Let’s look at some current data for Boone County, Missouri:

Sale To List Ratio

Sale to List Price Ratio
The Average Sale to List Price and Average Sale to Original List Price ratios are both down slightly, at about 97.2% and a hair over 95%, respectively. Buyers are offering less, and sellers giving away more, to make the deal work. The difference between these metrics is that, in the latter, the seller has already recognized a need for a price reduction and acted on it. As a buyer, I’d feel pretty happy about the potential to save $10k on a $200k listing, and I’d let that potential inform my negotiating strategy.

Days On Market
Days on Market
Average Days on Market and Average Cumulative Days on Market are creeping back up to just under 70 and right at 80, respectively. Inventory is sitting a little bit longer than last month, further supporting the movement toward buyers’ increased power. My buyer would know that the longer a listing sits on the market, the more pressure the seller is under to unload it. How many $1k mortgage payments is it worth to get a little closer to your list price?

Summary
The more I look into the current market as it stands today, the more clearly I see it leaning in the buyer’s favor.

Merry Christmas, buyers :).