As the real estate market evolves in 2024, pricing homes accurately has become a paramount focus for our Flotilla Partners.In January, Flotilla held a pricing course addressing a recurring theme
Home Inventory Is on the Rise...But Are Buyers on Board?
Dated: January 18 2024
Good news for buyers! The Oklahoma City MLS shows a 2-year trend (December 2021 to December 2023) of a massive 106% increase in active homes for sale! Sellers are selling despite many still hanging onto the incredibly low interest rates they scored during the Pandemic Era.
The increase in listings means we’re slowly, but surely, returning to a balanced market. Industry professionals use Months Supply of Inventory (MSI) to determine how “healthy” the market is. MSI tells us how many months it would take to sell out of the supply of homes if no more homes were to come on the market. MSI takes into account both the number of homes coming on the market…and the amount that have actually sold.
And that’s where the real story comes in: Inventory is up, but buyers are waiting on the sidelines. While listings are increasing, closings are on a downward slope. This combination of high listings with low buyers means an apparent balanced supply of inventory, but the truth is that listings are sitting on the market longer while buyers sit back and wait for the market to become more favorable to them. And with good reason!
For the past 2 years, buyers have faced both increasing interest rates and increasing home prices. With these two factors drastically affecting affordability, one of them has to give in order to bring buyers back to the table. So which is it?
Market experts agree that it won’t be home prices that will fall. The market is, however, showing signs of an increasing number of price reductions for sellers who price their homes for yesterday’s market, not today’s. Searching for homes with price reductions means buyers might take a second look at their favorite homes that may have come down in price.
We should note that algorithmic pricing solutions (i.e., Zillow’s “Zestimate”) have been thrown far off by the wild pricing of previous years, and are struggling to come into line with today’s pricing.
So too are agents pricing listings simply based on comparable home cost per square foot—resulting in overpriced intial list prices, then chasing the market down with price reductions.
At Flotilla, we’ve developed a pricing system that provides a realistic list price based on the ultimate arbiter of your home’s value—its appraised value adjusted for comparable homes’ appraised value. It’s something we’re extremely proud of, and our Flotilla Partners are excited to use this new tool! And sellers will be amazed at how quickly their home can sell when priced appropriately!
The one factor experts agree that will change for the better in 2024 is interest rates. Rates peaked in late 2023 at about 7.79%. Indications from the Fed have experts predicting a year-end rate of anywhere from 6.5% on the most cautious side to even as low as 5.5% on the most optimistic end. The result could a few hundred dollars in monthly mortgage payment savings!
In summary, buyers holding out for a total market turnaround in prices are likely waiting for something that will never come. But serious & savvy buyers can be on the lookout for a continued number of price reductions from sellers adjusting to attract buyers who are on the sidelines. In addition, buyers looking to make a move this year should let their Flotilla Partner know as soon as possible, and start their home search now to get a feeling for prices. Be pre-approved & ready to make a well-informed offer on a home as interest rates become more favorable throughout the year!
© 2024 Flotilla Holdings, Inc.
Jennifer Arsenault is a renowned figure in the real estate industry, celebrated for her exceptional skills as a public speaker, brokerage consultant, and real estate instructor. With an unwavering ded....