October Market Snapshot

In our market, sales prices are up and interest rates are still sitting at historic lows. What does this mean for buyers and sellers?

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What’s happening in our local market?

Overall, we’re seeing really great activity. There have been some really good price gains over the second quarter—right around the 4% range. Over the year, we’re sitting at a 2% to 2.5% sales price increase, which is pretty healthy growth. In general, listings are getting great showing activity.

As far as home values go, they’re going to be directly affected by the amount of activity that’s happening in the market, so that 2% to 2.5% increase that we’re seeing tells us that we don’t have a glut of inventory. Though things are moving quickly, we’re not in a pure seller’s market, either. That said, the ratio of a seller’s list price to actual sale price is up almost a whole percent over the second quarter of 2015. This is a hugely positive statistic!

Currently, our market is carrying three to four months of inventory. This generally indicates a market that’s in balance – the number of buyers is sustaining the inventory that’s hitting the market but isn’t eating it up at a rate that would severely deplete inventory. The average days on market can vary between price ranges, but in the area as a whole, we’ve seen 18 to 20 days on market. Our Team Gillies listings in the area’s core price range average 12 to 13 days on market.

Interest rates are still at historic lows.

Interest rates are still at historic lows, so it’s an awesome time to get a mortgage. Money on a home priced between $300,000 and $600,000 is still super cheap. A lot of the government loans are still well under 4% as well. The Fed is about as split on this as we’ve seen, though, so a lot of speculators are looking for a possible rate hike in December.

These numbers mean it’s a good time to be both a buyer and a seller, but it’s an especially good time of year to be a buyer because you have less competition from other buyers that are moving into the area and we’re still seeing a good amount of homes coming on the market. Also, low rates mean your purchasing power near historic levels. I can explain further if you’re interested.

If you have any questions about the market, please feel free to email me or give me a call. I look forward to helping you!

Why Are Housing Inventory Levels Important?

We are here to provide valuable information whether you’re buying or selling.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

Housing inventory is a measurement of the number of homes that are on the market at a given time. We can look at inventory broadly in a market or in different price ranges to find out which section of the market is hottest and which presents more buyer opportunity. In this video I explain how inventory is measured and how the level of inventory affects buyers and sellers. 

A balanced level of inventory is typically defined as three to four months of available homes based on the rate at which homes are being sold. At this level, neither buyers nor sellers have a defined advantage and the market is generally stable. If inventory dips to one or two months’, buyers are forced to compete for the relative lack of homes and sellers have stronger pricing and negotiation leverage. When buyers experience an inventory shortage they tend to make offers more quickly with less negotiation - this puts upward pressure on prices and helps homes sell more quickly. 

A buyer’s market, on the other hand, occurs when there is a surplus of inventory - say five to seven months or more. The tables turn and a buyer gains the leverage in this situation. Instead of buyers competing for the very best listings, sellers have to compete for the best qualified purchasers. If there is only one qualified buyer for every 5 or 7 homes on the market, he or she is a hot commodity and sellers will do what they can to secure that buyer.

WE ARE HERE TO PROVIDE VALUABLE INFORMATION WHETHER YOU’RE BUYING OR SELLING.

Whether you’re buying or selling, we are here to provide valuable information like this to help you make the best decisions for your unique situation. If you have any questions for us, don’t hesitate to give us a call or send us an email. We would love to hear from you.