Where did that hot market go?

Coldwell Banker Best Realty Clint Freeman - September 18, 2021

Sellers preparing their homes for the market in late spring or mid-summer who were finally able to launch in August might have been in for a chilling surprise. With the spring of 2021 being the most robust and brisk market since 2005, buyers and sellers in the past few weeks woke up to notice a slowdown in sales activity. Indeed, homes presently in escrow have slipped 30 percent from July. In July the Ridgecrest area saw 87 site-built homes in escrow as compared to 78 in August, and 61 in mid-September.

The cooling off is also reflected in the monthly absorption rate. Our local area has flowed in a remarkable sellers’ market for the past ten years. October 2020 hit a high pace when the housing inventory was at only 0.47 months of inventory. At that time houses were moving so quickly that if no others came on the market, and momentum continued, theoretically it would take about 15 days to sell all the available homes for sale. At present, the ratio of sales has shifted to 1.39 months of inventory and thus marks a bit of a release of the spring frenzy.

Despite the slight rise of inventory and a cooling period Ridgecrest still remains a sellers’ market. Units of sold homes continue to outpace homes presently for sale. The supply of active site-built homes sits at 75 units. Also, a strong point is that 43 out of 51 homes sold in August, or 84 percent, sold for list price or above. Over the past year this percentage has remained well in the 70 and 80 percentiles.

Another point sellers found is that a robust market does not necessarily mean they will always be able to receive their top dollar asking price. Of the 75 homes presently on the market, averaging 52 days on the market, 36 percent have undergone a price adjustment in order to attract attention from interested buyers. In comparison to homes sold over the past 90 days, only 15% experienced a price adjustment during it’s marketing period before an offer was accepted.

Why some homes in remarkable condition linger on the market, and others in less desirable shape sell amazingly fast sometimes remains a mystery, even for us realtors. When the market cools some sellers begin to panic and ask why their home is not selling. Over the past season the trend is that new construction is the hot item as well as refurbished and remodeled homes. Also, despite the entertainment that HGTV may bring many buyers do not like to take on a huge refurbishing project. Homes that need a lot of repair, updating, and are older tend to hang on the market. However, if the home is priced right and perceived as a bargain to a buyer, it will finally move. In a cooler market sellers might want to reassess what they are offering buyers in terms of price and condition.

Need more info about buying in selling in a shifting market? Give me a call, Clint Freeman at (760) 382-1082, and let’s talk!

Story First Published: 2021-10-01