Let’s start our market analysis with the Price Decrease trend. It’s the easiest chart to understand. It’s an indicator of certainty. Sellers must be certain that the asking price of their house will result in a sale.
If a seller is certain the house will sell at the listed price, there’s no need to reduce the price. If there is uncertainty about the price or buyer’s ability to purchase the house at the listed price, a remedy is a price “correction” (reduction). Price always wins.
The highest price certainty appears to be in the winter when there are traditionally the fewest houses for sale. Supply is low, so demand is high. The “buying season” typically starts at spring break and kicks into high gear after school lets out for the year. Buyers accelerate until just before school starts and then hit the brakes. Since school starts in September, houses need to be under contract in August or July for peak volume prices.
When nothing else interferes, home prices tend to follow the same cyclical pattern. Listing prices increase as demand increases. As prices increase, certainty decreases. As availability decreases, certainty increases.
I’m getting ahead of myself, but the Price Decrease chart shows the balance between increased prices and uncertainty about those prices in this market. Most price decreases hit the market as the school enrollment window starts to close. As folks settle for the school year, 1) fewer houses are listed and 2) supply decreases while prices remain stable in this market. These two factors create certainty for sellers. There’s not much price flexibility when sellers are certain to sell the house.
Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212
DFWmark.com
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