I’m back with your bi-weekly Western Montana real estate market update for the month of October.
In my last few videos, I’ve discussed information and tips for the sellers in our market; today, it’s all about the buyers. How can a buyer take advantage of this market?
Let’s face it: Buyers have had a rough time finding the homes they want in this market. There’s been very little to choose from, and those that are available have often had some patina on them. They’ve been combatting multiple-offer scenarios right and left, often giving up in the heat of a bidding war.
Now, however, the market is beginning to balance itself, shifting toward a buyer’s market.
Our average days on market is increasing. At the moment, it takes about 140 days for a home to leave the market. We’ve seen hundreds of price reductions coming through the MLS.
Back in May and June in Missoula, there were about 200 homes for sale. Now, there are about 400 homes for sale—our inventory has doubled.
A year ago, our interest rates were around 3%, where they’re now up over 5% for the first time in seven or eight years.
"There’s so much more to choose from now than there was before, so don’t wait for prices to drop."
What does all this mean for a buyer?
Well, sellers that have had their home on the market for a long period of time are starting to reduce their prices, and are also anxious to sell their homes before the wintertime. They’re beginning to realize they can no longer get these pie-in-the-sky prices. That means you can get great deals on homes available in the market.
Interest rates are set to up again, so you should think about getting in the market before that happens. If the rates go up just one percentage point on a $300,000 loan, that’s an increase of about $300 on your monthly payment. Keep that in mind if you were thinking of waiting until spring to enter the market.
There’s so much more to choose from now than there was before, so don’t wait for prices to drop. If your credit isn’t where you’d like it to be, we can put you in contact with lenders who can help you formulate a plan to get approved for a home loan as soon as possible.
For sellers, I have only one sentence: Prices are dropping, so you can either sell now or wait for them to drop even lower before you sell. The choice should be clear.
If you have any questions or are looking to buy or sell a home, reach out to us. We’re the best team to work within the area.
As prices start to cool off and the market shifts to a buyers market, which is where it is headed, make sure you don't get left out in the cold and miss the mark. Sellers often ask me, “How do I know if my home is overpriced?”
Actually, there is a simple way to test this. Looking at the number of showings you’re having each week is a good way to gauge whether your listing is reasonably priced. With this in mind, the ideal number of weekly showings your home should see will depend on your price point.
"Reduced listings tend to see a higher level of exposure."
Homes at and below the $450,000 mark, for example, should have between three to four showings each week.
However, the amount of time a home spends on the market will also indicate how fairly it’s been priced. If a home sits on the market for more than three weeks, the number of showings it sees will likely taper off.
If you’ve had between 10 to 15 showings but no offers, you should reduce your price by 3% to 5%. If you’ve had one or two showings each week, but haven’t seen any offers, you may need to reduce your price by about 10%. And, finally, if you’re seeing a complete lack of showings, your home is probably overpriced by between 10% to 20%.
No one likes to lower their price, but not doing so when necessary could be a major mistake. When buyers see a home has sat on the market for a while, they will tend to wonder if something is wrong with it. Reduced listings, on the other hand, tend to see a higher level of exposure.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.
I am grateful for not only my team, but also all of you. I was just looking at the numbers and we have 86 sold and pending homes. This wouldn't be possible without the hard work of my administrative, sales, and marketing team as well as all of the referrals I get from past and current clients like you.
To show our appreciation for our clients we had an amazing customer appreciation party at the Highlander Brewing Company in July. Over 100 past clients, friends, families, and vendors came and had fun. I just want to say thank you for joining us and for sending us business so far this year.
As for the market, it was booming until May 1. Then we had low inventory and were getting multiple offers. Now, though, we have seen a severe slowdown in the number of showings and offers received marketwide.
So, what's happening? As I told you back in June, the inventory is increasing. In Missoula, even though we are still below historic averages, we have an average days on market of 132 days. Currently, there are 390 properties listed for sale on the market. This is over 100 more than what we saw from February to May. When the days on market start to increase, sellers start to get nervous and lower their price. A snowball effect then occurs for neighborhood comps, bringing them down as well.
Meanwhile, in Hamilton, there is an average of 280 days on market, which puts us in a buyer’s market. There are currently 135 homes for sale. Here, we are seeing many high-end homes come onto the market which I think is driving the market upward.
"If interest rates increase another point, this could mean buyers could pay an additional $350 to $400 per month for their mortgage versus buying now."
In Florence, there are 65 properties currently listed with an average days on market of 146. Stevensville has 46 homes for sale with an average of 144 days on market.
What you need to remember about these creeping up numbers is that anything over 180 days on market is moving into a buyer's market. Sellers, I can't stress enough that we are seeing a leveling in pricing and an increase in the number of days on market. If you think waiting until next spring is a good idea, you should know that with increasing interest rates and decreasing comps, you could end up with tens of thousands of dollars less on your sale. So, why not just sell now?
Buyers, you should get out and buy now because the increased inventory gives you more to choose from and you can take advantage of price reductions from sellers sitting on the market. Also, if interest rates increase by another point, this could cost you an additional $350 to $400 per month for your mortgage.
If you are a buyer and want to see a property, all you have to do is contact us and someone on my team can go with you any time. If you are thinking about selling your home, let us know if you want us to do an evaluation of your home. We look forward to speaking with you.
If you’re considering selling your home on your own, aka listing it as For Sale By Owner (FSBO), I want to provide you with some tips and tricks to help you succeed, as well as highlight some potential pitfalls to avoid in the process.
1. No lowball investor offers. Around 90% of the calls FSBO sellers are likely to receive about their listing will be from people who aren’t qualified to buy the home. In your ad, be sure to put the stipulation of “no lowball investor offers.”
2. No contract for deed. Additionally, specify “no contract for deed” as well. The rate of default on contracts for deeds is very high, and many people are looking for something to rent-to-own. If that’s something you’d like to do, then that’s up to you. However a lot of times, it can be a recipe for disaster.
3. Your buyers must be pre-approved. There are approximately 2,700 homes on our MLS as we speak, so consider this as you sell: How are buyers going to find your home, and why would they buy yours over a competing seller’s? As a FSBO seller, what kind of exposure do you expect to get for your listing? When we as agents put a home on the market, we can put your listing on around 1,000 websites.
4. What will your costs be to sell on your own? In your ad, if you do not offer to cooperate with a real estate agent, then you likely won’t get any real estate agent’s clients, because those buyers are under contract with their agents, and they certainly won’t allow them to buy your home if you’re not offering some sort of compensation. Hiring a listing agent will get you more than selling on your own.
"How are buyers going to find your home, and why would they buy yours over a competing seller’s?"
5. Consider your experience with negotiating. Capable agents negotiate several transaction per year. If you’re not trained to negotiate or do home inspections, you might be headed for a bad transaction.
6. How are you ensuring that you’ve properly valued your home? Again, without experience or expertise in the field, you could be leaving money on the table or overpricing your home, both of which will lead you to problems later on.
7. Can you handle the activity? Does your lifestyle allow for answering multiple calls a day from inquiring buyers? Many will simply move on from your home if you don’t contact them in short order. We’re master salespeople, and we can handle phone calls, appointments, liability, appraisals, inspections, negotiations, and all the rest. We have many staff members that divide up the work to help make a transaction smooth.
If you have any questions about selling your home on your own or would like to learn the merits of hiring an agent, please don’t hesitate to reach out to me. We can help make sure that you sell your home for top dollar.
What is the latest news for homebuyers in Western Montana?
The latest statistics from our market just came out a week ago, and one important figure I want to mention is the average days on market. The average days on market has risen to 120. This means sellers are sitting on the market longer, and I’ve seen many price reductions happen throughout the MLS during this time. This has also caused inventory to increase.
Another thing to keep in mind is interest rates are also rising. The Federal Reserve just raised them, and they are scheduled to raise them twice more before the year is over. Although mortgage rates and interest rates do not necessarily run congruent to each other, the last time interest rates went up, so did mortgage rates.
"Get out there and buy a home before rates go up again."
Last year, it was predicted that interest rates would rise from 4.01% to 4.8%, and that is exactly what has happened. That means if you would have bought a $250,000 home last year at 4.01%, your mortgage payment would’ve been $1,194 per month. If you buy that same $250,000 home this year at a rate of 4.8%, your mortgage payment will be $1,381. That is a $186 difference each month.
If you wait until next year to buy after interest rates have gone up even further, you will likely have to pay an even higher mortgage payment. Do not wait around for rates to go down because where they are at now is the lowest they will be for a while.
The increase in inventory, the rash of price reductions, and the specter of rising interest rates make now the time to buy.
We would love to help you find the home of your dreams and structure the best deal possible for you and your family. If you are ready to get off the fence, give me a call or send me an email. If you have any other questions or real estate needs, please feel free to reach out to me as well. I look forward to hearing from you.
I want to go over what it is going on this spring. People are fighting for homes and paying way more than asking price in some cases.
Right now, there are just over 300 homes for sale in Missoula.
We are seeing the average days on market settle right around 100 days. If you are a seller and your house is on the market for longer than 90 days, the price may be too high. Buyers, if you see a house on the market for more than 90 days, have your Realtor pull comps to make sure that you are getting a good deal.
In Lolo, there are only 14 homes on the market. If you are interested in selling in Lolo and you don’t put your home on the market, take your temperature because this is the time to sell. We will get multiple offers and you will make more money.
"Sellers, if your home is on the market for over 90 days, you should consider a price reduction."
The average days on the market in Lolo has increased from its February low of 65 days because of the increased inventory. The homes that we do see on the market in Lolo are priced much higher, although not overpriced, which will increase the average days on market.
In Florence, there are 43 current listings. We will see more homes listed in June, which means that buyers will have more options and could potentially get a better deal. If you're a buyer, you'll still have to probably settle for a little less than what you want because inventory is overall lower than it's been in previous years, but you can still take advantage of some of that appreciation.
Right now, Florence is sitting at 140 days on the market because there are a lot of higher price range listings keeping that number up. Homes that are $350,000 or less are selling quickly.
Frenchtown has only 11 homes listed, with the days on market sitting at 90. In January that number was nearly 220. If you are in Frenchtown and want to sell, do not wait until June when there will be more competition.
There are 71 listings in Stevensville. The days on the market for them is all the way up to nearly 240.
We have very limited inventory and still have 90 or more days on the market. Sellers, unless your home is on the market for 90 to 120 days, there is no need to worry. After that time, you should consider a price reduction.
If you have any additional questions about the current market or are interested in listing or buying a home, please contact me by phone or email. I look forward to speaking with you soon.
Today I wanted to reach out and update you on what we’ve been noticing in the Missoula and Ravalli County markets.
For the first time since I can remember, we’ve had four appraisals in 60 days come in below our sales price. That’s a lot like ‘mental appreciation’: What a buyer is willing to pay is outpacing the actual rise in house values.
As a buyer, you really need to look out for that to make sure you’re not overpaying. As a seller, you might hear that the market is so good, but keep it in the back of your mind that the house might not appraise.
For instance, we received five or six offers on one of our properties, and two or three of those offers were over the asking price. We didn’t actually end up going with the highest one because we didn’t think it would appraise. The one we did accept was the best offer that we thought it would appraise for. In fact, it didn’t—it came in about $13,000 to $14,000 below that. For that situation, we had to have another round of negotiations and it is about to successfully close.
"If you keep an eye out on the points I’ve addressed today, you should have a less stressful transaction."
This is the hottest seller’s market we’ve ever experienced. However, if your home is not selling, pay attention to the feedback. It could be that the home is outdated. If a buyer walks into a home priced at $385,000 but the home hasn’t been updated since it was built 20 years ago, would it be worth it to put that much money into the house? Suppose it costs you $50,000 to remodel the kitchen and bathrooms and maybe put down some new concrete: Would the house then be worth $430,000?
If the answer is no, I’d steer clear of that home, as a buyer. That home should probably have been priced around $340,000 or $350,000. That means, as a seller, your home might be priced too high in relationship to the relative age of the home. Watch out for outdated features such as hollow-core doors, brass doorknobs, green carpets, and so on.
Additionally, pay attention to the days on market. The average time a home spends on the market in the Missoula area is about 100 days, and the farther we go down the Bitterroot, that starts to increase.
If you keep an eye out on the points I’ve addressed today, you should have a less stressful transaction.
For any questions or if you’re in need of assistance with buying or selling a home in this competitive market, please reach out to me. We’re always here to help and coach you.
Last time, I discussed how to get your offer accepted in this crazy seller’s market. Today, I wanted to continue that topic with a few more tips so that you can be a more educated buyer.
In a situation in which you have multiple offers on a home to sort through, a buyer can offer something called a tiered offer. Essentially, this is when the buyer gives you permission to take whatever the top offer is and make it so theirs exceeds it by a certain amount. It’s a good way for the buyer to get their offer accepted and for the seller to get more money for their home.
You can also ask the listing agent if they’re going to do a multi-counteroffer. Sometimes they don’t want to; they just want the highest and best. You have to put your best foot forward.
If you’re selling a home and also looking to buy one to move into, here’s what I can tell you: don’t send an offer to my selling client. Not to be rude, but why would I accept that offer and get them tied up in a pending or contingent sale when I could just sell to someone who doesn’t also have a home to sell? If you’re a buyer who also has a house to sell, you need to make sure that your own house is under contract. Having as few contingencies as possible will give you the best chance to get your offer approved.
"Having as few contingencies as possible will give you the best chance to get your offer approved."
We have a lot of cash offers coming in for certain price ranges. Remember that the seller gets a check from title at closing, so cash is not king in a seller’s market. Whether you’re financing or paying cash, the seller wants what the seller wants.
On our website, you can sign up to receive set up alerts for the area(s) that you’re looking in. Our site updates every five minutes, so you can get alerts when something new comes on the market. Be ready to go out and view the property, because it could just be a couple days before that home is sold.
You might also consider buying new construction. If you’re more analytical and you want time to think about things, this will be a good route for you. Also, if you’re a buyer with a house to sell, builders may be the only people who might accept your offer.
As a listing agent, I know how to wade through all this information, so if you have a home to sell or if you’re a buyer who wants the best chance of getting your offer approved, feel free to reach out to me. We can send you details of our marketing plan and give general advice about how to successfully buy and sell.
A lot of buyers have been calling me recently to ask about getting their offers approved. They say they’ve been putting several forward, but haven’t had any luck in having them accepted.
Today, I’d like to share some tips and information about the current market and getting your offer accepted.
Rates, prices, and seller confidence are all up right now. However so is buyer frustration. This is because affordability is down, and it’s become increasingly difficult to secure a deal on a home listing.
"As a buyer, you have to set yourself up to succeed."
One hurdle buyers are encountering lately is the fact that rates have risen since last year. Unfortunately, rates are going to continue to rise. This lower affordability has been forcing buyers to put forward lower offers.
Also, inventory is sparse, with just 2,700 homes in our entire local market.
But there’s no reason to panic. Don’t overthink; go out and make an offer. You must be ready to pay at or above asking price.
Don’t play games right now. If you want to secure a home, you’ll have to be prepared to compete with multiple offers. As a buyer, you have to set yourself up to succeed.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
Many people have recently asked me, “What’s going on in our market?”
First of all, seller confidence is very high due to rising prices. Prices have risen so much in our area that it’s beginning to become difficult for buyers to find affordable housing.
As for inventory, we are seeing historic lows. Our entire local MLS had 2,700 homes for sale at the end of the year. Of those, 650 expired as we entered the new year, meaning now we’re left with just around 1,900 listings.
Given that we’re in such a hot seller’s market, though, you may be wondering why so many of those listings expired? It’s because sellers are confident and are, therefore, asking more for their homes.
"Prices have risen so much in our area that it’s becoming difficult for buyers to find affordable housing."
Interest rates have also risen, going from 3.3% to 4.3%. This makes homes even less attainable for buyers, today. Also, there isn’t much new construction happening recently. Developers are hesitant, but we need new homes in order to boost our market’s inventory.
That said, even though interest rates are not as low as they were, they are still very low overall.
Today’s buyers need to enter the market as soon as possible. Given the current state of the market, you will almost certainly have to pay the full asking price. However, there are still financing options out there that can help.
Even desperate sellers can still get full price in today’s market, so stay away from making any lowball offers.
If you’re worried about buying and selling simultaneously, have your agent put a contingency in your contract. This will protect you during your transition.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.