Average Home Price Stats
According to a recent National Association of Realtors report the average home price has surpassed the 9 year record of $230,400. Some of us are still reeling from the effects of the market downturn. So how did the market turn around and what does it mean for you and I when we either decide to sell or buy, or both?
According to NAR the reason for the average home price increase is twofold:
- Increased rate at which homes are selling. More homes are selling now and quite a few of those homes that are selling were on the market a few short weeks, or even just a few days.
- Low inventory of current homes for sale. Sellers are still either unsure about the stability of the real estate market and so hesitant to list their homes for sale. Or they have not been able to find a home to purchase.
The combination of these facts means that for many areas of the country we are now in a seller’s market. There are still homes available for prospective buyers to purchase. Those buyers will need to be active in the market and ready to put offers on homes shortly after they are listed or risk losing out. Also, due to rising home prices and the sheer number of buyers ready and able to purchase, the incredible deals that investors and astute buyers were enjoying since the market crash back in 2009 are not going to be as easy to find.
What are the effects of the current state of our real estate market?
- Days on Market. Correctly priced homes should sell relatively quickly. While there may be other factors that come into play, if your home has been on the market for awhile without much interest you may want to look at the price you are asking. Buyers are very savvy on current prices of homes due to the easy availability of data on the internet and through apps on their devices.
- List to Sales Price Ratio. In the current market it is common to see multiple offers on a home at or even above list price. So lowball offers are a no go. Many homes are selling at or close to list price. When you’re in the market for a home be ready with a pre qualification letter from a lender and make sure you are working with a real estate agent who is responsive to you and can follow up quickly when the right home hits the market.
- Low Appraisals. Appraisals have not yet caught up with the increased home prices. This means it may be difficult for a home to appraise at the selling price. And if the home doesn’t appraise, the buyer may not be able to finance the home at the agreed upon list price. Be cautious in multi offer situations. When the offers start coming in it may be tempting to select the highest offer, however when it doesn’t appraise the transaction may not close.