4 Signs The Housing Bottom Will Be Behind Us
If you read the cover article in our latest issue of Mountain Homes, you know that it’s our opinion you should strike now while the iron is hot to buy a home at the lowest price with historically-low interest rates. We indicated that there is no ‘official’ bottom to the market; no one will blow a whistle and say, “this is the bottom”. We’ll only know the bottom by looking back and seeing signs it’s past.
What are those signs? Here are 4 indicators:
1. Inventories will start to decline. Overall numbers of homes on the market will subside–and the most desirable home will leave the market first.
2. Days on Market (DOM) will decline. The MLS measures how long properties stay on the market and publishes an average DOM figure which we track each month.
3. Homes will sell for closer to asking price. The MLS also publishes “original asking price to selling price ratio” and “last asking price to selling price ratio” averages. The latter ratio should improve first and by the time the first ratio improves, we will have definitely turned the corner on the market downturn.
4. Incentives disappear. Sellers are currenly courting buyers with more than good prices; they’re offering to help pay closing costs, they’re throwing in extra inclusions, they’re being flexible with possession dates and so forth. Before prices start to firm, before DOM and ask price-to-sell price ratios start to fall and before inventories start to subside, sellers will refuse to grant incentives.
Watch for these changes in the marketplace and you’ll watch our market turn around.
Tupper
