Local Real Estate Agents Discuss Recent Changes in the Housing Market
For the last few years, a hot real estate market changed the landscape for those buying, selling or building new homes. The coronavirus pandemic changed mindsets and forced people to rethink their living situations.
As people chose to relocate, the real estate market quickly rose to one where there was more demand to buy in many areas than there were properties available. In many areas across the U.S., it became a sellers’ market. In fact, the market became so hot that many of those selling their homes were seeing buyers jump onto their properties quickly and offer more than the asking price.
However, during the same time period, the pandemic and multiple other factors caused record-high levels of inflation. The federal government responded by raising interest rates to slow rising prices across the board.
Once The Fed started raising rates, the real estate market seemed to slow down nationwide. And, if the increases keep up, the market could keep taking a turn for the worse.
Local Real Estate Agents Discuss Changes in the Housing Market
Kellie Case with Keller Williams Clients’ Choice Realty has seen changes in the market but she has not noticed a huge decline in activity. She said that the demand for buyers has decreased, but not to the point where real estate activity has greatly slowed.
“I think the market is moderating more than it is stalling,” Case said. “Typically real estate doesn’t just take a nose dive, it moves slower than the stock market and bond market and things like that. I have seen it to be a little more normal again. We have seen more days on market for listings and more price reductions occurring on the market, which is actually more of a normal behavior than what we have seen the last couple of years.”
Bill Camp with Your Neighborhood Realty Inc. said that he has seen the market slow some, but that there is still a lot of activity. He said that where they are seeing a low inventory are houses that fit into the affordable housing category.
“According to the August numbers in Teller County, we closed on three less properties than we did at this time last year,” Camp explained. “Last year, the county closed on 82 properties and this year we are at 79. The days on the market have gone from an average of 10 last August to 17 this year. So houses are staying on the market a little bit longer. Last year, we were getting 101 percent of the asking price. So we were getting some offers that were over, but this year we are still getting 99.9 percent of the asking price. So sales are still coming in at around 100 percent of the asking price, it is just taking longer to sell. And then the average sale price is up $52,000 from last August.”
Camp also said that the market for land sales has increased over the last year in Teller County. “For land last year, there were 25 vacant land sales in August and this year there has been 46 sold,” Camp said. “So, we have seen almost double the land sales. Those aren’t quite coming in at the list price, but typically land gets listed high. But the days on the market for land is about a third of what it was last year. You can see that the land inventory where there used to be a bunch, over the last year it has just dissipated as people have been swallowing them up.”
However, Tom Idleman with Home Smart said that he has seen the market change since interest rates started climbing. And, he said that future increases could cause the market to slow to the point of a recession.
“My opinion is that the market is slowing down,” Idleman said. “Before it didn’t matter what you put on the market, it was gone. So I don’t believe other agents when they say the market hasn’t slowed down because now it depends on the property. There are some properties out there that are hanging out for a while and others that are still selling just like that. It is definitely a slowdown but what is happening is that it is turning from a sellers’ market back to a balanced market.”
Idleman said that he has seen a lot more price reductions and properties aren’t selling within a few days like they were.
“What happens every time when you go from a sellers’ market to a balanced market especially, you have all of these inflated prices and bidding wars going on and you have all of these sellers saying, ‘my neighbor sold their house for this much, I want that,’” Idleman explained. “But then you have the interest rates jumping up and buyers can’t afford as much. It is lessening the buyer pool. The amount of buyers that can afford the $600,000 or $700,000 house isn’t as great as it was before. So it is creating a bigger gap between what the sellers want for their house and what the buyers can afford.”
How Do Websites Like Zillow Affect the Market?
People have more access to house values and listings through websites like Zillow. But most real estate agents tell people to take the values listed on websites with a grain of salt.
“Zillow is a national website, so they are not here and they are not in the homes,” Kellie Case said. “They don’t see the homes, the calculations are purely mathematical. They are not a real estate agent that is in the home seeing what the conditions are and what the amenities there are and what really makes it an attractive home to price it accurately.”
“I think that those sites always hurt the market,” Bill Camp said. “Typically the numbers on Zillow aren’t very accurate. And it’s all over the place. Sometimes, it values properties for more than what they are selling for and some are less. I think it is more of a guideline than a number to go on. If you really want to know what your property is worth, get an experienced realtor. They will tell you exactly what they are selling for and if you list it too high it might hurt you in the long run. If you are wanting to buy or sell, get a realtor to run the numbers for you on both sides of it. Make sure you don’t overpay and make sure you don’t over list your house.”
