People keep asking me, “Is the market softening?”
It’s a great question and the answer is, “Yes,” and “No.”
There are fewer homes closing recently, but we see that same trend every year. July and August are the peak months for homes to close that went under contract in June and July. What we are seeing now appears to be this same cyclical trend. When I reviewed the data relative to past years, the number of home deals closed is nearly the same for July 2017 as it was in the previous 4 years. (See chart, below)
What does seem to be notable, is the final price relative to the initial asking price. The chart, below, shows home sale prices for the past 5 years. During a hot market, homes sell above asking price. This is a result of increased demand.
When homes sell below the asking price, as we see for July, we can call that a soft market. But the degree of softening is questionable, since the sales price in previous years was a lot lower than the recent sales. When I factor in all of the data points, it looks more like a strong market in July, relative to past years. It is noteworthy, however, that home prices don’t seem to be frantically bid above asking price as we were seeing in past months.
Meanwhile, the median home prices for Longmont, Colorado came down from the high in May of $425,500 to around $380,000 in June and July (see the chart, below). We saw this same decrease in median sales price last year. It was followed by increases in both August and September. So, it is likely the same will happen this year.
If you’re planning to sell a house in the coming months, this means you likely won’t face a buying frenzy with multiple bids. This depends, of course, on a number of factors including the location, price and style of your home. If you’re hoping to buy a home right now, you may have a little more time to make up your mind. Whichever side of the market you are on, you can likely expect a more traditional transaction, with time to make thoughtful decisions and still get a good deal.