Traditionally, spring and early summer are when the vast majority of sellers put their homes on the market. Normally, we start to see the number of new homes coming to market decline from August through the end of the year, but this year has been anything but normal.

Market conditions over the past several months have created what could be considered the ultimate seller's market. Homes have been receiving multiple offers, bidding wars are taking place, and home prices have been pushed to new heights thanks to high buyer demand and low inventory. I think we all know these conditions won’t last forever. As a matter of fact, we’re starting to see signs of the market shifting and cooling off just a little bit. That doesn't mean we're going to flip to a balanced, or a buyer's market, any time soon, but signs of a change are definitely starting to appear.

With that in mind, if you have been considering selling, here are 4 reasons why this fall may be a perfect time.

1) Your House Will Sell Quickly

One of the reasons iBuyer services like OpenDoor and Zillow Offers have become popular is because of the convenience they offer sellers (it does come at a cost by the way). After all, selling your home can be a pain. You always have to keep it clean, be prepared to leave for showings each and every day, open houses potentially on the weekends, etc. Sellers don't want the process to last forever but the open market does offer the best opportunity to maximize the sales price.

According to the National Association of Realtors, nationally, homes are going under contract in just 17 days. While some homes go under contract much faster, 17 days is the same average days until contract we are seeing here in Frisco according to August’s numbers. I will say I have noticed a few more homes being on the market 25, 30, or even 40+ plus days which is something we haven’t seen in months.

2) Buyer Are Willing to Compete for Your House

More competition means multiple offers and bidding wars are likely. I am still noticing the majority of home listings here in Frisco are receiving multiple offers. Strange thing is, even homes that have been on the market for 30, 35, or 40 days are suddenly receiving two, three, four, five offers on them even if they have had limited activity for the first month. Multiple offers are still very much a part of our local market.

That same survey by the National Association of Realtors I referenced above shows that nationally, homes are receiving an average of 4.5 offers each. I don’t know what the average for Frisco is as those numbers are not tracked but can tell you the homes my team has been writing offers on have been averaging 3 to 5 offers each over the past month.

So if the majority of home listings are receiving multiple offers how exactly is the market starting to cool? Whenever a home receives multiple offers you are obviously in a hot market, but instead of seeing 15, 20, 40+ offers per house like we were seeing on some listings a few months ago, the number of offers being received has decreased substantially.

Another example of slightly less competition can be seen in the list-to-sales price ratio. In July, homes in Frisco were selling for an average of 107% of the list price. In August, homes sold for an average of 104% of list price. Still very solid, but an indication that the market is starting to cool slightly.

3) Low Supply Keeps Your Home in the Spotlight

When supply is low, it keeps your home in the spotlight. When there's less competition your home will receive more attention and is likely to receive multiple offers, which is what pushes the sales price up. The ideal situation all sellers want.

Just this past weekend I was looking at homes with some prospective buyers and one of the homes we viewed, in my opinion, was just okay. The layout was fine, but the condition wasn't great. The home needed flooring, paint, and some TLC, Wouldn't be what I would consider tip-top condition, yet was still priced on the upper end of the comparable range. Nevertheless, it was one of only two homes for sale in the entire community, which is a desirable master-planned community. When I spoke to the listing agent he let me know they already had two offers in hand and the home had only been on the market for two days. Just an example of how low supply works to the seller’s advantage.

Nationally, there is currently 2.6 months’ worth of supply, which is more than double what we are seeing locally. Inventory here in Frisco was unchanged in August from July at 1.1 months supply. Not much inventory at all when you consider 6 months is what’s needed for the market to be considered balanced, but an improvement from the 0.5 months of inventory we had at the beginning of summer.

4) If Your Thinking of Moving Up Now Might be the Time

If you currently own your own home and you've been thinking of moving up to a larger, more expensive home, now could be the perfect time to make that move. Over the past 12 to 24 months the value of the home you're currently living in has undoubtedly grown significantly enabling you to build significant equity. That equity, coupled with current low mortgage rates, can be leveraged to make your dream of a new home a reality. Keep in mind, these near historic low mortgage rates won’t last forever.

Experts are forecasting interest rates will rise in their latest forecast. Freddie Mac says:

While we forecast rates to increase gradually later in the year, we don’t expect to see a rapid increase. At the end of the year, we forecast 30-year rates will be around 3.4%, rising to 3.8% by the fourth quarter of 2022.”

Rising mortgage rates impact not only your monthly payment but your purchasing power. A rate of 3.8% would be a 1% increase from where rates are today, and while that doesn’t sound like much, a 1% increase in mortgage rates will decrease your purchasing power by approximately 10%. In a market that continues to appreciate that means you will be able to afford less home next year than you can today.

Bottom Line

The combination of high demand and low supply creates the best opportunity to maximize your sales price. If you’ve been thinking of making a move, let’s schedule a call to see if this fall is the right time to put your home on the market.