Just as the three most important things in real estate are location, location, location, the most widely debated wild card would have to be timing.
How critical is timing when it comes to making the best possible deal?
If the last several years have taught us anything, it’s that you can’t control the economy, supply and demand, or interest rates.
In real estate, the economy can change based on where you choose to live and the local job picture. Supply and demand can fluctuate depending on price range, but as a general rule of thumb, if the supply (number of properties for sale) divided by the demand (number of buyers in the market) is less than four months of inventory (months to sell the current number of homes) it’s a sellers market, four to six months is a balanced market and more than six months is a buyer’s market. When it comes to interest rates – every percentage increase means potential buyers lose about 10 percent of their borrowing power – all indications point to the end of historic lows which will affect selling prices.
It’s no secret that sellers tend to shift their focus away from real estate during the holidays. Many believe their property will show better in the spring and summer, especially since winter weather can make looking at homes unappealing for buyers.
In fact, home inventory usually falls about 15 percent in the winter compared to the summer months, and home prices dip an average of $7,000 after Labor Day and usually hit rock bottom in December, according to the National Association of REALTORS® (NAR).
However coming off a hot summer selling season that was plagued by low inventory and supercharged with multiple offers at or above asking prices, the Northwest Indiana residential real estate market remained strong as the region transitioned into fall with a steady increase of homes sold in both Lake and Porter counties, reports Jeanne Sommer, broker/owner of CENTURY 21 Alliance Group.
“The market continued its upward trend with an increase in residential home sales and average price, as well as a decrease in days to sell,” she said.
Using data calculated from Jan. 1 to Oct. 31 in 2013 compared to Jan. 1 to Oct. 31 in 2012 from the latest Greater Northwest Indiana Association of REALTORS® (GNIAR) report, housing inventory for Porter County was 4.87 months of supply in October, just below the national average of five months of supply, and Lake County was just above at 5.14 months of supply.
“A 6 month supply of homes indicates a healthy market, so these numbers show that we are in a very good market,” Sommer added.
Through October year over year, GNIAR shows the number of homes sold in Porter County was up 23 percent while the average sales price increased 1 percent. In addition, the average amount of days a home was on the market, another key factor in the health of a market, decreased 13 percent.
Lake County saw similar changes in activity. The number of homes sold in Lake County increased 22 percent and the average sales price increased 1 percent. In addition, the average number of days to sell decreased 13 percent.
So while spring and summer are notoriously the high season for home sales, there are still a good number of serious, pre-qualified buyers who are still looking to make their move before interest rates rise as predicted in 2014.
That’s good news for sellers who need to sell. Just keep in mind that buyers are searching for the best condition properties in their price range. Know your competition and price your property accordingly.