Ask a Realtor: Should I be worried about a market slowdown?
Dear Joan: I think I am seeing an increasing number of homes for sale, and more homes languishing on the market in my neighborhood, judging from the signs in the yards. We keep hearing about homes flying off the shelf, and bidding wars, and shortage of homes on the market … and I cannot make sense of that in my neighborhood.
Friends of mine have said they are seeing more signs going up and that those signs are staying longer in their neighborhoods, too. Is it an illusion that we are not seeing correctly, or are home sales slowing down? Should we be worried about the whole economy again if it’s true that there is another big housing slowdown? Tell me something good!
— Watchful and Worried
Dear Watchful and Worried: I believe there is some merit in your observations, but I do not agree with the conclusion you fear. In the latest published market analysis for April, the Vail Board of Realtors showed that in 2018 the averages days on market for a home to sell was 115 days and in April of 2019 it took an average of 131 days for a home to sell.
We know that some homes do sell quickly after coming on the market, but the average days on market indicates that some of the homes actually do “languish” before they sell, or at least go off the market in some fashion. I think the better question is, why do some homes sell so fast and some appear to take forever?
We used to say homes sold for three reasons: location, location and location. However, now it’s price, condition and location. I believe the increased days on the market can largely be attributed to price. Many homeowners have been waiting for a good market to sell, and it is here. However, Buyers are very savvy today and can compare homes on the market easily on the internet. So they are not fooled by someone overpricing their home for what the market is doing in their neighborhood.
This also brings up “condition” which can also be easily seen on the internet. The majority of the buyers today are not looking for a “project.” Homes that are dated or have a lot of differed maintenance need to be priced below the market price of homes that are in top condition, in order for them to sell in a reasonable length of time. Now, a home in poor condition can sell very quickly, if it is priced low enough, and a somewhat overpriced home can sell if it is in great condition and a great location.
As you can see, there are a lot of variables, but none of these make me think the economy is in trouble. I actually think we have at least a couple more years of very pleasant growth and opportunity. Hope this helped you see a clearer picture.
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