It's no secret that we're experiencing a seller's market at the moment. Sellers definitely have more power than their buying counterparts. Especially in an area like Charleston. Our inventory was already thin before we began seeing an influx of new residents. Now our inventory is very low. This is great news for seller, but not so great for buyers. One interesting thing about real estate is that everything is cyclical. Once these sellers have sold, they will want to then buy a new home and the power struggle has reverted. The one saving grace to this whole dynamic is that mortgage rates are impressively low. These low mortgage rates are making things much more economical at the end of the day. Unlike the lead up to the bubble, we are not seeing homes being terribly overpriced across the board and there are very few dangerous mortgages on the market. As I said, real estate is cyclical and an up or down market is always around the corner. Unfortunately, we never know how long it will take to round that corner.
Realtor Magazine published a very insightful article today, which expresses seller confidence and data quite nice. The article is entitled, "It's a Good Time to Sell, Americans Say," and it's based on surveys gathered by Redfin.com. According to the article, 52% of homeowners say now is a great time to sell in their are. This number is up from 34% last year. And to further my point from earlier, 58% of those surveyed believe that sellers gave more power than buyers in today's market.
The following are some of the reasons that sellers expressed their interest in selling soon:
- I want a bigger or nicer home: 40%
- I am relocating: 24%
- I want to cash out: 21%
- I want to downsize: 20%
- I have had a familial change: 19%
- I want a better school district: 15%
The following are some of the surveyed seller's concerns about selling soon:
- I may not find another home I like: 30%
- Prices might fall before I can sell: 26%
- I may not find different home I can afford: 25%
- The economy might change to discourage buyers: 23%
- The house may under-appraise: 19%
The article goes on to state two more stats that I find interesting. 55% of sellers say they will price their home amongst the middle of the sold comparable to insure a successful sale. 19% of those surveyed said they would price high because the know negotiations will reduce their profit. These numbers both seem pretty true to what I experience when meeting with sellers. However, it's important to remember as a seller that you do not need to price the property higher than necessary to insure a successful sale. If your property is priced amongst the average of the sold prices, you obviously have a fair list price and should not over-price your home. Over-priced homes are very difficult to close and if they remain on the market too long, they will appear blighted to buyers. All of this data seems very representational of what I experience in the Charleston market. It's important to remember that the lack of inventory is very frustrating and can cause a lot of stress, but the positive thing about this market is that interest rates are very low and will make up the difference as long as you don't overpay for the home in the first place. A one or two percent interest reduction doesn't seem like much, but when that's applied to hundreds of thousands of dollars, it makes a remarkable difference.
Remember me if you're interested in buying or selling residential, commercial or investment real estate in Charleston, SC!