While certainly a popular sentiment, it's not entirely accurate. There are little fires here and little fires there, and it's true that houses in some areas are selling faster than others and some types of houses generate multiple offers.
In order to understand the market we are currently in here in Halifax, you need to understand what is driving the multiple offers, low inventory, etc.
A metric that REALTORS® use is the "Sales to List Price Ratio", or in others words... What is the percentage of price over the list price that homes are selling for?... On average!
Currently it is at 103.99%* which means that if a house was listed at $100,000 it would, on average, sell for $103,990. If it was listed at $300,000 it would, on average, sell for $311,970.
*As of March 8th for the previous 7 days. For updated weekly numbers go to FastStats.ca
So while the headlines might display the dramatic, the reality is a little different. In order to get an average, some properties will sell for a lot more or a little more and some will sell for a lot less or a little less! It's all about the averages.
If the "market was on fire" the sales to list price ratio would be MUCH, MUCH higher!
Historical Pricing vs. HYSTERICAL Pricing
Are REALTORS® Underpricing Listings?
When doing a market analysis for a new listing, REALTORS® look backwards, historically, to recent sales of similar type properties, in similar areas, within the time frame of similar activity. However, when sufficient homes as previously described sell, the historical pricing, in the current market, goes up. By doing this, REALTORS® avoid the HYSTERICAL pricing model and use market values to set the listing price.
Keep in mind, supply and demand can move the selling prices up, just as an oversupply can move selling prices down!
The Number of Listings is at an All Time Low
While this statement is true compared to previous years, it does not reflect the fact that new listings are coming on the market every day. In fact, since June 2020 to today*, 4,640 properties have been listed for sale in HRM - some of these sold quicker than others based on area, type of house, etc.
*As of March 5
During the same period, 6,121 properties have sold which leaves the perception that inventory is low, however, every day more properties are listed for sale. Real Estate is not only a transactional business it is very much a cyclical business - there will always be highs and lows in the market.
So why in the past year, have more homes sold than are being listed?
Some of this is the fallout and impact of the COVID-19 pandemic, which truth be told, has impacted all aspects of our lives. Selling a property during the pandemic does not need to be daunting or scary, check out our COVID protocols for selling in a pandemic.
Where Will I Go If My Home Sells?
While the thought of selling your house may be scary relative to this question, the reality is that we are beginning to see more houses being listed for sale every day.
And the process of finding your next house will take planning and patience to navigate this type of a market. And having the help of a REALTOR® who knows how to navigate this type of market is key.
While numbers and statistics are great, the reality is knowing and understanding HOW the market works and WHAT you need to do to make it work for you are also important. Don't let the numbers and the headlines scare you from pursuing your Real Estate Dreams.
The answer is only important if you ask the right question!
You Have Questions... We Have Answers!
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