As is typical of the winter season in real estate, the market has slowed down a bit. Compared to last month, it’s taking longer to get a house under contract; sellers are generally getting near, but not over, their asking price; and inventory has slightly decreased. These factors are evidenced in January’s statistics, as days on market have increased from 36.3 to 50.2; sold-to-list price ratio has decreased from 97.8% to 96; and inventory has moved from 1.93 months to 1.84 months.
With the market changing, it can be confusing to know what’s going to happen next. The best we can do is look at statistics and trends and use experience to guide us.
Consumers are unsure of what to expect and, with that in mind, here are a few of the frequently asked questions (and their answers):
Are we in a buyer’s market or a seller’s market?
To understand the type of market we’re in, you have to look at the months of inventory for a balanced market and what exactly tips the scale one way or another. The “months of inventory” is determined by looking at the number of houses available and, if no new properties were added to the market, how many months it would take to sell all the properties (assuming sales continued at a steady pace).*
Balanced Market = 6 months of inventory
Seller’s Market = Less than 6 months of inventory
Buyer’s Market = Greater than 6 months of inventory
Moore County currently has 1.84 months of inventory, making it a seller’s market.
What’s the significance of Days on Market?
Continuous Days on Market (CDOM) is the average number of days the home is on the market, starting from the home’s listing date till it goes under contract.* The days on market gives an indicator of how quickly a home will go under contract and is influenced by a variety of factors: politics, economy, interest rates, the type of market (buyers/sellers/balanced), and whether a home is well-priced (according to market value, which is determined by the recently-sold prices of other similar homes in the same area). Moore County’s CDOM has been rising since June 2022, yet this number is still relatively low compared to pre-pandemic averages of 70-90 days.
Can sellers still get the exorbitant asking prices like they have for the last couple of years?
The short answer is no, not usually. Of course, it depends on the location and condition of the home; a pristine home in a premiere location may get well over asking price and have multiple offers, which would not be unusual. However, Moore County’s sold-to-list ratio is currently at 96% indicating that, on average, homes are selling for less than their original asking price.
When is the best time to buy a house?
The best time to buy a house is when you need to and/or can afford to. There is no good or bad time. The housing market is always fluctuating, and a good real estate agent is there to navigate you through it, protecting your interests by helping you get the best value for your dollar. Speaking to a local lender is also beneficial, as they know the local market and can recommend the best loan to meet your needs and fit in with your financial goals.
When is the best time to sell?
Real estate is a sound investment, which typically grows in value the longer it’s owned. The best time to sell is when you need to, or when it’s advantageous to you financially. The pandemic market, with its increasing home values, made it advantageous for homeowners to sell their primary and/or secondary properties. Although prices aren’t so much increasing right now, they are holding, and the median year-over-year sales price is up by 5.04%, indicating that year-over-year value is still increasing, as expected.
*Term definitions are adapted from NC Regional MLS.