Early in the 2017 Season
Many markets in the country are experiencing a supply and demand problem with housing inventory, and Seeley Lake is no exception. Our major selling season usually runs from May to September. At the beginning of the 2017 selling season, we were already experiencing a lack of inventory. Buyer demand has been strong but our home inventory just hasn’t been able to keep up with the demand. The lack of supply, coupled with a healthy demand, led some to speculate the we were going to see an up-tick in real estate. This speculation began pushing prices up.
The Rice Ridge and Liberty fires were ignited by lightening in late July and began to grow in early August. Despite the smoke, buyers still continued to call and visit the area to look at property. As the air quality conditions deteriorated, the market began to slow. With the increasing fire danger and evacuation warnings, insurance companies refused to insure area properties, making it almost impossible to close a transaction (insurance is required for mortgages). Several homes went under contract during the months of July and August but were not able to close. Finally, in late September, insurance companies gave the green light and transactions began to close.
Late Season Improvement
Since September 10th, when evacuation warnings were lifted, we have seen 9 homes go under contract. This is a good sign that buyers are still eager to buy property in Seeley Lake!
Comparison with Last Year
A snapshot of year to date residential sales from 2016 and 2017 in the Seeley Lake area shows:
· From January 1 to October 7, 2016: 52 homes sold.
· From January 1 to October 7, 2017: 31 homes sold, with 14 sales pending.
What’s Causing Low Inventory?
So why aren’t sellers excited about selling? According to a recent survey conducted by “First American”, 3 important reasons current homeowners are not willing to put their homes on the market include:
· Existing home homeowners are worried that they will not be able to find a home to buy,
· Existing homeowners’ mortgage rates are lower than the current rates, and
· Insufficient or negative equity in the home.
If these reasons are not a concern for you as a seller, you will be subject to far less competition than previously seen. The result should be a quick sale for the highest possible price.
Lack of inventory slows home sales and puts upward pressure on prices. As values increase, more homeowners will be coming out of the negative equity from the recession and will be ready to sell. This will produce more competition for those properties currently listed. Record low mortgage rates have boosted buyer demand and the supply of houses for sale has not kept up.
Sellers who do decide to sell now may be tempted to overprice their properties to take advantage of the strong buyer demand. Today’s buyers are highly informed, and won’t look at homes they feel are overpriced. Pricing your home too high dramatically lessens the demand for your home. In the end, an overpriced house helps to sell the competition. As always, consult with your real estate professional for the fair market value of your property before listing.