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Is the Augusta Real Estate Market Shifting?

Before I dig too deeply into this topic, let me just say that as of September 1, 2021, we are still very much in a seller’s market, and we probably will not wake up on September 2 to anything different.  That said, I do see signs that, in my opinion, may point toward a market that has peaked and may even be beginning to slow down, even if just a little bit.  Here are a few of these observations.

1)  Grossly overpriced properties are sitting on the market.  Notice I said grossly overpriced.  As long as sellers do not go overboard on their price, homes are still going under contract in days rather than months; however, I am also seeing more and more appraisals coming in for less than the sale price, suggesting the days of sellers naming their price, no matter how ridiculous, may be nearing an end.  Add in the fact that we are heading into the seasonal fall/winter slow down, and time could be running out for those hoping to sell at the height of the seller’s market.  

2)  More open houses.  Upon taking a new listing, the first thing I typically do is host an open house the very first weekend it is on the market.  However, for the past year or so, I have been unable to host any open houses, because homes are under contract before I have time to do one.  More and more, this is no longer the case.

3)  More price reductions.  A few months ago, price reductions were almost unheard of.  This is because sellers could pretty much name their price, and buyers would pay it out of F.O.M.O. (Fear Of Missing Out).  Adding to the madness, appraisers were handing out high appraisals like candy.  However, in recent weeks, I have noticed more and more price reductions, where homes are sitting on the market a little longer and sellers are forced to lower the price. 

4)  Inventory has bottomed out.  In the real estate world, we measure inventory using a metric called months supply of homes.  This is how many months it would take to sell all of the homes currently on the market before we completely running out of homes.  In a buyer’s market, that number would be 6 months or more.  In a neutral market, it may be 3 to 6 months; however, in our current market, that number is currently about 1 month, where it has held steady since June.  This points to the possibility that inventory/home supply has nowhere to go but up. 

5)  Home buyers can not find a home in their prequalified price range.  As home prices continue to rise faster than the amount home buyers can get approved for, more and more home shoppers are priced out of the market.  This is bad for buyers and sellers.  For now, inventory is so low that we are not seeing much of an impact from this on prices, but as housing inventory eventually starts to recover, prices will eventually be forced to fall back to more affordable levels.  This is Economics 101:  Supply vs Demand.

To conclude, let me just repeat that we are still very much in a seller’s market, but I think we can all agree that the current market will not last forever.  That said, I believe there are signs all around us that the market is starting to shift.  I am not suggesting that I think we are in a housing bubble just waiting to burst and send us back to 2008 prices.  I really don’t think that is the case.  What I am suggesting is that supply and demand is real, and I am seeing more and more buyers who can not find a home within the range they are prequalified for.  This shows me that homes are too expensive for many to afford, and that will eventually put a strain on demand, and as demand goes down, prices will no doubt follow.  The question in my mind is how much, how fast, and when.

If you have a home you are considering selling, send an email to cstill@meybohm.com, and I will be happy to send you a Right Price Analysis.  If you are looking to buy and need to get prequalified, reach out to my friend McKenzie Cochran with Bank South Mortgage to see if now is the time for you to buy your next home.

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