We currently have 25 homes and lots in title worth $13.2 MM. Half are our listings and half are other agent’s listings. A few are lots, but most are homes. We’re representing our buyer clients on those. We’ve already sold about $4 million this year and technically, the peak selling season (March thru August) has just begun.
Am I thrilled about the activity? Absolutely! We’ve never started a year this strong. Is this a sign it’s going to be a great year for real estate? Not necessarily. Something very similar to this happened a couple of years ago and the year ended with a big surprise.
Two years ago, we also had a big first quarter. We thought we were on our way to knocking it out of the park. In fact, I would have bet on it, but what happened was just the opposite. The market actually softened in June when it should have been peaking. All of our KW Allen team leaders told me they were seeing the exact same thing. Some thought that might be the beginning of the dreaded “market shift” so many “real estate experts” had been talking about. Of course, that shift still hasn’t occurred, so here’s what I think happened.
Buyers usually look early and buy later in the season. Many wait until their kids are out of school in June and they’ve taken a vacation to start the process. They believe they’ll have plenty of time to buy and sell over the summer months. Others don’t want to risk buying too early in the season because a home they might like better could come onto the market later. Often times it takes having a home or two sell out from underneath them because they either delayed making their offer or made too low an offer before they realize they need to make their move.
However two years ago, for some reason, the buyers were out in force earlier in the year than I can remember. Low inventory, which is normal early in the year (because many sellers think waiting until later will make their home more valuable) often meant multiple offer situations. Just like then, we’re seeing multiple offer situations even on the higher price point homes ($1 million plus). By the time we got to June when we were expecting things to really heat up, so many buyers had already made their purchases it became a soft market. We still had the homes that had been out there and hadn’t sold along with the listings just coming onto the market.
The buyers believed (and rightly so) there was no rush to make a buying decision. There was no sense of urgency because there were lots of choices. Some waited until August to make their offers knowing there would be very motivated Sellers. I made a mental note of what happened back then and vowed to prepare our sellers for that possibility if we ever started out the year with a bang like this. Timing is everything in this business and as a seller, you want to be in the mix when the market is hot.
By the way, quite a few of those homes, including some of our listings, never sold that year. I believe if they’d been priced fairly from day one and out there for Buyers to see in March when the market was really hot, they would have sold.
So what does this year hold for our real estate market? It’s way too early to predict but I know one thing for sure; there are only a finite number of Buyers every year wanting to buy a home in any given area. Every time one of them buys a home, the Buyer pool shrinks. We prefer to have our homes on the market during theentire6 golden selling months so they don’t miss the flurry of activity whenever it may occur.
Written By: Tom Grisak