Look around and you probably have noticed that there has been a distinctive shift in the real estate market here in Northeast Florida and the Jacksonville Metro area specifically. I mean, it is palpable. Earlier this year, say around March, we were in the midst of a buying frenzy – a tempest really. Interest rates were super low and inventory levels (real estate parlance for the number of homes on the market available for sale at any given time) were low as well. It was really a trying time for any buyer who happened to be in the market at that time, and as a real estate professional who was working with buyers, and trying to guide them through that morass, we had to get creative as we were competing with sometimes 10, 12, or even 20+ other buyers vying for the same property.
Sellers had to analyze and evaluate offers based on escalation clauses, appraisal gap waivers, and crazy things like inspection period waivers. It was a crazy town and exhausting for anyone working in real estate sales.
Fast forward to today and boy have the tables shifted. Interest rates are, as of this writing, much higher than they were 8 months ago, and buying activity has fallen off a cliff. I mean, people are still buying homes of course – every day in fact, but just in much lower volumes than previously. One of the most notable characteristics of this change is that buyers are no longer willing to overpay for properties. Sellers are having to adapt to this new reality, and many of the large amounts of price reductions that I am seeing on the market right now are a reflection of sellers inevitably coming to grips with this new reality. This is something that is affecting every price point right now.
Take a look at the graph below showing the average days on the market. You can see how this number has ballooned in the last few months. From a low of about 27 days in May, we are now closer to an average of 53 days on the market. Almost double.
Look at the data regarding inventory levels, and you can see how this number, while historically still low, has soared of late.
Finally, look at the percentage of the list price that sellers have been able to procure. Notice the deviation at the end? This number has definitely decreased and is reflective of the many necessary price reductions that have been happening lately.
What does all this mean to you if you are a seller? Well, you are going to have to work a lot harder to get your house sold within a reasonable time frame.
Presentation – Something that is normally very important, is going to only become more so as we progress through this market.
Condition - Buyers are loath to acquire any property in this market that is in need of work. The stats show that they strongly prefer something that is move-in ready. Might be harder to sell that fixer-upper, but regardless of the condition, you are going to need a smart and aggressive marketing plan.
Don’t forget the price - the price needs to be right and the need for the art of pricing a property correctly and strategically has come back strong. Buyers are wary right now, and there is a tepid approach to buying real estate that characterizes today’s buyers overall. It is a Bear market for sure. Your house needs to be a compelling option for the buyers of today. Price, condition, appeal, and presentation all have to come together in order to tell a compelling story to potential buyers. Be sure to stage that house! Use top-notch photography and better yet, professional video marketing.
Fortunately, we offer all of these skills and areas of expertise. Pricing property correctly is a very specific and exacting exercise, based on data and to a lesser extent, experience. Staging advice – We hold a staging expert certification and partner with some of the best stagers around. We have partnered with top-quality, carefully vetted photography providers, and we have developed an in-house video studio to provide some of the best video home marketing videos in the area. Our approach to real estate marketing is digital, nuanced, aggressive, and effective. Contact us today to find out what we can do for you or even if you just have any questions. I love to discuss all things real estate related!
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