California home sales dropped 3.5 percent month-to-month to 450,360 homes and continued to lag last year’s pace,
declining 19.6 percent from 560,390 sales a year ago. The median price rose 2.3 percent over last year from $297,500 to $304,220, the smallest year-to-year gain in 12 months. At the same time, inventory levels crept up to 6.5 months in October, up from 6.1 months in September and 4.2 months last October.
National & Statewide Headlines Give An Overview of Housing Market Activity…
There is a barrage of news stories and statistics about where the housing market is headed. However, national and even statewide headlines do not necessarily reflect what is actually happening in your own backyard. You also need to consider current market conditions when working with your REALTOR® to price your home. It is extremely important to price your home right or face unrealistic expectations of how long the home will remain on the market. The most fundamental piece of information clients want from their REALTOR® is the true value of the home they are selling, most commonly found in an appraisal or REALTORS®’ Comparative Market Analysis (CMA). But the CMA must be viewed in the context of overall market and economic conditions along with other forces that may be affecting conditions in the neighborhood as well as the value of your particular property. By using aggregate statistics, a REALTOR® can explain how overall market conditions add to or take away from the value of the property based on the CMA.
…But Local Information is Key
Consider getting a CMA for your home that shows a list price somewhat below the price you were hoping for, also suppose your price point is in the $750,000 to $1 million range. Even though the statewide unsold inventory index was recently reported to be 6.5 months, indicative of a balanced or lean market and stable or rising prices, this aggregate statistic does not necessarily reflect what is going on in this particular price tier. For example, in the month of October, inventory in the state of California was at just 6 months in the lower price tiers ($300,000 and below), while the $750,000 to $1 million price tier showed 8.2 months of supply, and the $1 million plus tier showed inventory exceeding 10 months of supply. In this case the additional aggregate market information on inventory levels helps you and your REALTOR® price your home to sell. Inventory is an important aggregate indicator to determine how heated the market is or isn’t. In addition, looking at the more granular level inventory picture can help bring your expectations in line with what’s going on in your neighborhood. By accounting for inventory levels along with a REALTORS®’ CMA, the home will be better priced to sell in a timely fashion and less likely to go through a string of price discounts, will save you time, and will likely result in greater satisfaction with the outcome.