Real Estate Marketing & Beyond
The hot summer selling market has come to an end. Kids are back in school. Listings that were freshly on the market in spring and summer are now long in the tooth if they haven’t sold. Thoughts begin turning to cooler days and even the holidays. It’s a change in season for the real estate market as well as the weather.
If you’ve procrastinated about listing your home for sale, you’re quickly running out of time. While fall is the second best time to sell a home (after summer), during the coming holiday season is the least desirable. Still, people wanting to be in a new home in time for the holidays will be looking in earnest at this time of year. The next six weeks has a history of producing good sales results. Considering the inventory level remains tight, this year’s early fall is expected to produce good results for sellers, essentially prolonging the summer season. However, the opportunity is slipping away.
Those that listed houses near the first part of June are seeing their 90-day listings come to an end. The end of the season and the end of your listing indicate it’s time to reevaluate your situation. It will be a few more weeks before data from the summer season is consolidated and available. However, July saw the largest quarterly increase in listings over the past three years. The spring market rose at three times the rate of the same period in 2017 according to Trulia, a listing and research company. That shouldn’t overly alarm sellers because the inventory level was so low that the supply of homes for sale is still down 5.3 percent compared with a year ago.
Something worth noting is that as inventory increases the sales of existing homes is slowing. Not substantially but existing home sales decreased 0.7 percent in July compared to a year ago. According to the National Association of Realtors®, July was the 4th month that sales declined and sales are at the slowest pace in two years. Considering how hungry the market has been for an increase in inventory, slowing sales at this time leads to the conclusion that prices exceed affordability. Two of the biggest markets dramatize this fact. In NYC the median household spends 65 percent of income to own a home. In L.A. the number is 59 percent. Most people simply cannot afford to buy at today’s prices.
Going into the fall season, the three major factors affecting sales will be kids returning to school, weather, and prices. If you’ve been on the market during most of the summer season and have an urgent need to sell but haven’t, it’s probably time to lower the price. If you thought you could sell without sprucing the place up that opportunity has passed. With kids back in school the number of buyers will be fewer.
Fall weather and kids are a location factor. Selling in retirement communities such as Florida and Arizona have an advantage this time of year over northern states. Snowbirds without kids will keep these markets active beyond the next six weeks. Younger people with kids in northern states have already exited the market and those remaining can be expected to become fewer as the days become shorter.
The change in season is also a time to reevaluate your marketing strategy. Although this has been far from a traditional real estate cycle, historically prices lag sales by a few months and sales have been slowing this year in most major markets. Indications are that for sales to increase, prices are going to decrease (even if only slightly). This is almost certainly true as the number of buyers decrease with the change in season. You should also be talking to your agent about your advertising and marketing strategy. Look at both where your house has been marketed and where it has not been. If one or two sources you’ve previously used are producing leads, you want to increase your exposure there. As the demographics change with the season, you want to reconsider marketing opportunities you’ve overlooked until now. For instance, in the Midwest the combination of newly created jobs and lower home prices is attracting people from more expensive coastal cities. You want to make sure local HR offices are aware of your listing. And reconsider sprucing the place up if you haven’t already or it might need to be touched up again.
What do you see for the fall market? Please comment below. If you have a question that might interest other readers or a suggestion for a future article please submit ideas to [email protected].
Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for seven years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. In the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.
