Waiting For (Home) Prices To Decrease?
If you live in our Denver Metro area and watch the news, I'm sure you have heard the reports of prices continuing to increase for the last 7+ years. I know a lot of people thought this would be the year prices end up decreasing due to covid. However, thats the furthest from the truth. I also have quite a few people who say they are waiting to purchase a home until the "bubble bursts" and the prices drop drastically. These are all reasonable thoughts and I would be lying if I said they haven't crossed my mind at all. However, when I have these thoughts, I turn to the data (provided by Megan Aller) to see if it shows signs of a market that is slowing down so I have included the data here.
Here's what we are looking for when it comes to a shift in the market, which would in turn cause prices to decrease:
Showings, how many per listing each week and how many showings on average to receive a contract.
If showings per property goes down, we may see shift.
If it requires more showings per property to receive offers & go under contract, this may be another indication of shift.
Pending and New Listing activity.
If new listings increase (huge amount of properties for sale) or pending sales drop (less buyer activity) then we may see shift.
The odds of selling.
This is a percentage % of all homes available vs. those that go under contract and/or sell in a given 30-day period. If this amount drops, that could indicate shift.
Price Reductions, what percentage % of homes are reducing and how much.
This is counterintuitive. A shift to buyer opportunity would reveal itself by more widespread price reductions but at lower amounts.
Therefore, you can see shift coming if these items start presenting themselves. In our local market, we are actually not seeing any of these happen. In fact, we have a sever shortage of available homes for sale (listings) and have experienced a surge in buyer activity (likely the low interest rates plus people moving here plus a new desire for single family homes vs condo/townhouses), causing showings to increase, pending sales to increase, odds of selling to increase, and price reductions to decrease. Essentially, we are not seeing our market slowing down at all. As a prediction (not guaranteed), I don't foresee the market slowing anytime soon, which again means prices very well could continue increasing for the foreseeable future.
If you're waiting for prices to decrease, I would encourage you to stop waiting and jump into the market now so that you can gain equity as the prices continue to increase.
If you have any questions at all, please don't hesitate to call me!