How can buyers be assured they are paying market value for their new home? Are our rising home prices creating fear in the market place for first-time homeowners?
On most listing appointments, I am asked, “You are the expert, what’s our best number?”
Showing my Sellers the data that I research to come up with the best price for their home is one of my biggest challenges.
However, most homes today are selling within 96% of their originally listed price.
Pricing is key. Even though our homes prices in Cooper City and Davie are steadily rising, there is so much “pent-up demand” for homes, if the price is right, the home will sell.
If a buyer is on the fence, the home usually gets sold out from under him with multiple bids on the table. Buyers feel more threatened by rising mortgage rates than rising home prices.
However, NAR has this to say:
“Mortgage rates have been stuck in a holding pattern in recent months, which is a relief for spring homebuyers,” said Lawrence Yun (NAR’s Chief Economist). “With price growth showing little sign of slowing, prospective first-time buyers will be the most sensitive to any sudden uptick in rates in the months ahead.”
Price per square foot in Davie has risen from $188 a year ago to $191 and is steadily rising. Yun’s prediction and the rising cost of housing will surely affect the buying power of the new homeowner. In Cooper City, price per square foot has risen from $170 to $190 – now a contender with Davie.
What about average prices in our areas?
Cooper City remains close with average for “sale price” at $545,000 and average “closed price” at $549,000. On the other hand, Davie’s average “for sale” price is $997,000 and average “closed price” is $501,000.
Months of inventory for single-family homes in both cities is indicative of a seller’s market – extremely low.
What about our fear of another housing bubble?
As home values continue to rise, some are questioning whether we are approaching another housing bubble.
“National home values have surpassed the peak hit during the housing bubble and are at their highest value in more than a decade.”
Though that statement is correct, we must realize that just catching up with prices of a decade ago does not mean we are at bubble numbers. Also, Real Estate is local. It is great to see that our markets have recovered since the bubble of 2005-2012.
Because Davie’s and Cooper City’s inventory mostly deals with single family homes, we should not experience what the over-building of the condo market.
If there should be fear anywhere in our area, it should be the fear of rising rental prices.
“Rents rose 0.7 percent over the past year to a Zillow Rent Index (ZRI) of $1,412 per month.”
It takes a real professional, either on the buy or listing side, to assess the best market value of any home. The tools, the knowledge and the experience gets the job done for our customers.