June 2018 Market Update: Record Sales Prices Result in Fewer Closings

by | Jul 27, 2018 | Market Updates

Market Update Breaking All-Time Records

In June the average sales price reached its highest value ever at $244,830. That’s 8.7% more than a year ago.

​At the same time days on market (DOM) hit an all-time low of 23. This means that the average home sold in June was in contract within 23 days.

Let me tell you why this number is somewhat misleading…

Expensive homes over $350,000 take much longer to sell then starter homes. In their June news release the President of the Columbus Board of Realtors acknowledged that homes listed between $500,000 and $750,000 spent an average of 114 days on the MLS.

To set the right expectations I tell my sellers “if we don’t get an offer after the first weekend, it will probably take more than a month to sell.”

This chart shows how the average sales price has increased every year since 2012. It reached a new peak in June 2018 (red line).

The Market is Turning

Despite of skyrocketing home values and short DOMs we see a clear downturn of the housing market.

The total number of homes sold during the first half of 2018 was 2.7% lower than a year ago. This is mostly due to sales dropping substantially in May and June.

The number of new listings has increased just a little bit. Together with fewer sales this has improved the inventory situation.

The inventory is still a little lower than a year ago, but it’s improving. This chart clearly shows that we bottomed out, as the red line representing 2018 is almost identical to last year’s (blue) line.

What to Expect?

The downward trend of home sales will continue throughout July as the number of pending contracts is almost 6% lower than a year ago.

I believe we can no longer blame the low inventory alone for fewer sales.

Skyrocketing home values priced many first-time buyers out of the market.

Frustrated buyers who lost bidding wars during the spring season decided to renew their leases and are out of the market for another year.

Sellers have unrealistic expectations and price their houses too high.

June 2018 Housing Stats Summary

​Here are the exact numbers for June 2018 (compared to the same month a year ago);

  • Closed Transactions – 3,338 – DOWN by 5.1%
  • Pending Contracts – 3,905 – DOWN by 5.6%
  • Inventory for Sale – 4,912 – DOWN by only 3.2%
  • New Listings – 4,062 – DOWN by 3.7%
  • Days on Market – 23 – DOWN by 23.3%
  • Average Sales Price – $244,830 – UP by 8.7%

Tips for Sellers

We may be over the peak of the market, but this is still a great time to sell and get top dollar for your property. Here’s my advice:

​Correct Pricing Don’t overprice your home when you list. The hot spring market is over. Summer and fall listings will not generate enough buzz to incite a bidding war.

Improvements Buyers are picky. They will not pay top dollar for a home that’s not updated. If you want to sell “as-is” expect to take a discount on the purchase price.

Expert Marketing Even in a hot housing market you need to promote your listing with professional photos, videos, 3D virtual tours, high quality brochures, open houses, and online and offline advertising. That’s exactly what we do for our clients. You will net more if you hire us to list your house!

Tips for Buyers

Buyers will be able to breathe a sigh of relief in the second half of 2018.

First Time Buyers The market for starter homes below $250,000 will continue to be competitive. Many first-time buyers have been priced out of the market, but I see opportunities in homes that need some TLC. Lenders offer financing with very low-down payments and even cover repair costs.

Move Up Buyers If you are looking to move into an upscale home for $500K or more you will have lots of choices. There’s a large number of existing homes for sale, and you could also build a new home.

Be Ready & Decisive In a hot market you must have your lender approval or proof of funds letter ready to make an offer. Be prepared to pull the trigger and decide quickly.

Don’t Overpay Many listings are still overpriced as sellers base their list price on sales that happened during the spring buying season. A good Realtor will help you make a fair, competitive offer without overpaying for your new house.

Avoid the Mad Rush of the spring buying season. Go house hunting with me this fall!

Call or text me at (614) 975-9650! Let her help you get ready to buy or sell!