Recent data shows that the market is cooling off. In February 2021, there were 178 guard-gated homes for sale compared to 170 in February 2022, a decrease of only 4.5%. However, the number of pending sales at the end of February was down 38.2%—from 220 in 2021 to 136 in 2022. This can be attributed to the double-digit gains in appreciation we’ve seen over the last year. Yes, inventory is still low, but now prices are substantially higher, and many homeowners are continuing to push the envelope with unrealistic pricing.
Even with the slowdown, we expect to see appreciation in 2022 due to the fact that inventory will remain low. Interest rates are expected to rise throughout 2022, which will lead to the market softening a bit. Remember, supply and demand influence pricing. Low supply is unlikely to change much, but rising interest rates will lower the purchasing power of the buyers choosing to get a mortgage, therefore lowering demand.
Given the strength of the market, we’re seeing many situations where sellers are leaving money on the table. For example, properties listed as “Coming Soon” with one photo are selling before becoming “Active” in the MLS. It’s not surprising that highly motivated buyers make appointments to see homes like this immediately, but what about the buyers who have no idea how nice the home is because there are limited, poor-quality pictures? What about the out-of-state buyers who only have a single image to look at? These are lost opportunities. Photos, 3D tours, and property videos should all be complete before a property shows up in the MLS. This is the only way to drive the highest amount of interest in your home, ultimately netting you the best price and terms (which may include a free leaseback while you find a place to move). We get it; when sellers call us, they usually want their home sold yesterday. However, false starts are costly.
At the Rob Jensen Company, we know how to get it right and put a big smile on your face. Please give us a call and let us know what we can do for you.