We enter the new year with a very tight inventory in the overall residential markets for the area from Coral Gables to Palmetto Bay.
Homes priced under $500,000 will continue to have high demand with a broad buyer pool of locals and new arrivals. Namely, renters that want to own homes, the young producers, empty-nesters and others. In this market buyers must be prepared to compete with other buyers anxious to get into our area. Banks will ensure that prices paid are within fair market value to approve the loans in all the market segments. In this segment expect a sustainable year-over-year appreciation just at or slightly above inflation, say 3-4 percent. The current days on market of thirty to 60 days will likely prevail.
In homes that are priced between $500,000 and $1 million, the competition will also be stiff for buyers, but, also sellers. This market segment is well balanced with ninety to 160 days on market. Sellers will compete for this buyer pool which is smaller than the first, however, very promising. We’ve seen an influx of professionals moving their families into our area over the past year and anticipate the flow will increase. There are good paying jobs throughout the community and they bring in people from out of state that find our pricing reasonable. This market the appreciation of home values will continue, albeit at the rate of inflation, say 2 percent.
The smallest buyer pool will continue to be in the luxury market, or, homes priced above $1 million. There are, however, different price points where the inventory is less abundant. Specifically, the range between $2.5 and $3 million. This buyer pool tends to be very precise on their requirements and will only buy accordingly. Sellers must be prepared to make concessions on price and other terms, or, wait out the market until the inventory is absorbed. Homes above $3 million have grown like weeds with new construction and renovated older homes throughout the landscape. Here buyers have the pick of the litter.
The opportunities are for sellers in the homes below $500,000 who can reasonably predict a shorter time on market. Also, for buyers in the luxury market who will have ample inventory to select from. The most balanced market is the middle ground where both sellers and buyers will have to adjust their expectations for a successful transaction to take place.
In all market segments the sellers will do themselves a huge favor by show casing the home. Staging is not necessary, but, will help. Cleaning out the stuff that clutters the house will make you money. Sellers are in best position to know how to make the house look great. Now, get to it!
Buyers naturally have more knowledge of the market because they go to many more houses than sellers do. As sellers, you will also help yourself out by going to open houses, scheduling previews of your competition and making the necessary adjustments. This too will pay you back.
If not now, when? Great weather, no state taxes and a real estate market that has performed well attract many buyers. We’re enjoying a good market that allows us to make our next move. Many homeowners have built up equity on the home and can use it to realize moving to a different one. How much is in your home? What will you do with it? Decisions…