Many people heard the stories of home prices rising almost every week. I recall several times where I accompanied buyer clients that were interested in buying a new home from several builders. Each time we visited, we would be provided with a flyer of the available homes and told that the prices were subject to change. Initially, I and my buyer clients were skeptical to hear this but we learned very quickly that if we visited those same builders a week later, there was a new flyer and the prices had risen!
In the pre-owned market, I had to state a disclaimer when providing a Comparative Market Analysis report for a home my clients were considering submitting an offer. My disclaimer was that while the sold values indicated values for similar homes, those represented negotiated contracts at least 30-45 days earlier, meaning that those values really were not indicative of today’s value. I was able to demonstrate that by showing the pending home sales data on that same report where the listed prices were even higher than the sold prices and the number of days to contract was an even shorter timeframe. With very few exceptions, the shorter time a home is on the market, the higher price it will sell for. It is in the early selling stage that it will be highly sought after. Some people think that if they wait long enough, they will get THEIR price. The problem with that strategy is that the time it takes to sell eats into their net profit since most people’s mortgage payments are not paying the principal down fast enough to offset the additional monthly payments made.
Just as in the last 2 years as values changed almost weekly, we can expect that as long as inventory remains low and interest rates don’t change significantly, home prices will likely keep rising but not anywhere near the levels over the last 2 years. Still, every home seller wants to be sure that they have the latest data and real time “pulse” of the real estate market. If they live near new construction, their home values may not rise as fast as in other communities without this competition. Home builders have the ability to offer buyer incentives and reduced pricing that most sellers cannot match.
In North Texas, school zoning, road construction, and nearby commercial development can also impact home sales values. My clients know that they can call me at anytime to get a comprehensive review of the market factors for their home’s value, but sometimes they just want a ballpark figure of what their home’s value may be every so often. This year I have implemented a new tool that delivers to my clients and others with the same interest, their home’s valuation from a broad perspective. This tool is amazing in that it allows homeowners to add information should they feel the valuation is too low and does not consider recent updates. The best part is that the data is coming from a trusted source and not some secret algorithm where you can’t modify for upgrades or other features that would result in a more precise valuation. It’s great data that most people find interesting to look at each month. After all, their home is typically their largest investment.
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