INDUSTRY INSIGHT
A
s fall settles in and the
temperatures begin to cool, so
has the housing market. After
nearly a decade of increasing
home values, we are starting to see signs
of a slowing market. What has been
referred to as a seller’s market in recent
years appears to be transitioning toward a
more balanced market or even potentially
a buyer’s market.
A combination of events are driving
this transition. A lack of inventory in
the past three years has prompted an
approximate 23.3% increase in median
home sale prices in Allegheny County,
or 7.2% annually. As prices have moved
higher, so have mortgage rates. This has
created an affordability issue for many
buyers.
The other factor that continues to
weaken the housing market is the
preponderance of student loan debt that
is restricting the capacity of first-time
home buyers to enter the market. These
buyers allow existing homeowners to
“trade up,” selling one home to purchase
another. This increases transaction
volume in the market, which tends to
help home prices move higher.
An important caveat is that real
estate values are driven by local factors,
with a large factor being employment
trends. If there are more workers making
more income, housing will tend to
appreciate; all other factors being equal.
A transformative change in employment
trends, such as if Amazon announces
Pittsburgh as its selection for HQ2, would
likely shift the advantage back to sellers
almost irrespective of mortgage rates
given the pay scale for Amazon workers.
While the probabilities of such a decision
remain low, if it occurs, the Pittsburgh
regional real estate market would have
a substantial multi-year tailwind driving
home prices higher.
For both buyers and sellers, it’s
important to recognize the state of the
market when you are trying to buy or
SELLING YOUR HOME
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sell a home. Seller behavior ultimately
drives local market characteristics since
the decision of whether to list and what
price to accept drives the relative balance
between buyers and sellers.
For sellers, the first 5-7 days after listing
a property for sale are crucial and speaks
volumes as to whether you have priced
your property appropriately. I tell my
clients that if we are “hearing crickets,”
meaning no activity, chances are we
need at least a 10% downward price
adjustment. If sellers have showings but
no offers, the home is likely priced 5% too
high. My rule of thumb is that after eight
showings, there should be an offer on the
table if the home is priced properly.
If we are moving toward a buyer’s
market, sellers need to not only price
their home competitively but also make
sure their home is show ready. If a seller
is unable to get the home into the best
possible condition to get the best price,
it’s critically important to price it right.
Homes sell faster and for more money
when they have updated kitchens,
bathrooms and master suites. Finished
lower levels and usable outdoor space are
also important to many home buyers.
If you are a seller on a tight budget, I
would strongly suggest a deep clean and
decluttering, with fresh paint if possible.
You should consider having your carpets
professionally cleaned if you can’t afford
to replace them. If you own pets, make
sure that your home does not have
any odors and that all pet-related
items are out of sight during your
showings.
Addressing how the home
shows assumes that a
prospective buyer goes
inside. You should also
think about your home’s
curb appeal. Put some
attention into the
landscaping; yard
maintenance and
fresh mulch go
a long way toward improving a home’s
exterior appearance.
In all markets, but particularly in a
buyer’s market, an experienced agent
will help guide you to get the best price
as quickly as possible. I strongly suggest
interviewing 2-3 agents when you decide
to list your property for sale. It’s important
to know how many homes the agent has
sold within the past 6-12 months. Look at
the properties they’ve sold and talk with
past clients. Not all agents are created
equal; do your due diligence. A sales
listing that sits is a stressful situation for a
seller and for the listing agent.
Please contact Dawn Bierker at RE/MAX
360 Realty for a free consultation on
home values and
getting your
home ready
for sale.
ROSS TOWNSHIP
❘
WINTER 2018
7