The term is fraught with mystery and intrigue. In the desert, it seems the concept is shrugged off as myth or legend, experienced once upon a time, in the far away land of Seattle, San Francisco or Orange County. Grandchildren all over the valley drift off to sleep to the tales of unicorns, giant bean stocks, and the home that once received 5 above ask price offers in Huntington Beach.
Pinch yourself, because although you aren’t in the middle of a fairy tale, we are on the verge of, if not in a… seller’s market in Sun City Shadow Hills.
If you follow the real estate market in the community, it’s likely felt different than years past. Rightfully so. The inventory at the beginning of the season started low and has stayed consistently low throughout (currently 80 active homes for sale as of 3/12/18). We would normally see well over 100 active homes this time of year. Since the beginning of the year (1/1/18 – 3/12/18), median price per sqft. is up a nominal $2.41 from this time frame in 2017, the days on market is down almost two weeks (to 62 days), and the number of homes sold has increased 14 units to 45.
The telling stat, however, is the 4.2 rate of absorption. This indicates Sun City Shadow Hills currently has 4.2 months of inventory. Well below the 6 month benchmark that would indicate a balanced market.
Being that a “sellers market” isn’t something many homeowners have had much experience with here in the desert, there are definitely some misconceptions and recommendations that would benefit both buyers and sellers if they plan on participating.
Seller Misconceptions: “I can list my home above market value, put a sign up and get multiple offers.”
Some people might think that all you have to do is stick a sign in the yard and let the market take care of the rest. It might be easier to sell in a seller’s market but it takes a lot more to sell a home than hanging a sign out front.
The value of your home will still be based on what a buyer is willing to pay, and that offer will still be based on comparable sales. Our market in Sun City Shadow Hills is not at a point where multiple offers above asking is even close to the norm. Even in the smaller homes where inventory under $300K is dwindling and prices for these homes are appreciating significantly, multiple offer situations aren’t the norm yet. To get the highest sale price in the shortest amount of time, your home needs to be priced at market value and your home needs to be exposed to the largest number of qualified buyers possible. This is why the realtor you choose to represent you is so important.
Buyer Recommendations: Do your research, get organized and be decisive.
In a seller’s market, it benefits buyers to get all the help they can. If you have a seasoned agent on your side, you’ll probably have a better chance of getting the home you want. Working with the right real estate professional saves tons of time and stress, as they know the ins and outs of the process and can provide tremendous insight regarding upcoming inventory. They can also help you nail down how and where you can meet the needs you have for a home with the budget you have. Doing a little research up front, to find the right agent, will put you well ahead of the other buyers looking for the same dream home.
When you are competing against other buyers in a fast-paced market, it is vital to be offer-ready. Get your finances in order, deposit easily accessible, and pre-approved if you need a loan (not prequalified). With the help of your realtor, understand the areas/sqft/model etc. that you want to purchase in, so when a home that meets your criteria hits the market, all you will need to do is visit the property and place the offer.
We encourage our buyers to make a strong opening offer. If your finances are in order and it’s the right house, you need to make your best offer first to insure you don’t miss out on the house of your dreams. The motivation to buy what we want for as little money as possible is deeply ingrained in us. But trying to get a deal when you’re in a seller’s market might not be the best tactic.