First, let’s start with the good news… For the first two months of the year, our team experienced an increase of 61% in total sales compared to that of last year. Remarkable! With that being said, in the midst of our celebrations, we began to notice a significant slow-down in sales and inventory for the month of March. As it turns out, our observations of a sluggish start to the traditional spring market were shared by many. In large part, this is likely a result of the warmer weather that we experienced during the final months of winter. The spring market, which traditionally begins on or around March 15, actually started to blossom in January and February. This front loading of listings has left buyers out in force, looking for homes to purchase. However, where have all the new listings gone?
The number of properties listed for sale in the month of March have dropped 11% compared to this time last year. As a result, buyers have become fatigued, anxious, and frustrated with the lack of inventory. For those of you who may not know, there is a concept in real estate referred to as absorption rate. This is the rate at which available homes are sold during a given period of time. It is calculated by dividing the number of available homes by the average number of sales per month. A typical absorption rate for this area hovers around three months. To put the state of today's market into perspective, Brighton’s current absorption rate is less than one month. So, what does this mean? In essence, this means that there is no product, and tons of buyers. When a decent property is about to be put on the market, it is almost immediately snatched up by an eager buyer, sometimes before it has even been listed.
In the past, our team has enjoyed tremendous success by thinking outside of the box during difficult times of change. This year is no exception. Once again, we’ve chosen to use our resourcefulness and engage in business practices that are not available to some our colleagues. Most notably, we’ve started to walk our buyers through listings that are coming on the market for sale, with a promise to the seller that,
a) the buyer will give them the list price that they want and,
b) the buyer will close 4-5 months in the future.
This provides comfort to the seller who, as a result of selling their property, won’t suddenly find themselves out on the street. Four to five months gives them plenty of time to find a suitable home. The benefit for the buyer is, frankly, the fact that they were able to purchase a property without it ever being listed for sale. As a result of how well this has played out, we are in the process of seeking out more buyers and, in particular, more sellers that are interested in engaging in this type of business arrangement.
If you’re thinking about putting your property on the market, now is the time to do so. If you’re worried about formally listing, perhaps you would be more open to a similar arrangement as described above. In other words, you might want to sell your property quietly and off the market. If this is appealing to you as a potential seller, now is the time to pick up the phone and give us a call at (585) 218-6275!