As the sun begins to set on yet another year, what did we learn from the real estate market in 2015? Depending on how you look at it, 2015 was a good year for real estate. It was steady, it didn’t explode to an all-time high and it certainly wasn’t the lowest of lows.
From what the stats are showing, it remained slightly more of a seller’s market for the majority of the year. Listing inventory was high at the beginning of the year. A mild winter allowed for the showings and contract writing to get a much earlier start than usual. First quarter typically reports dismal numbers, but with the warmer than usual weather, we saw a bump in first quarter that typically we don’t enjoy until nearly the end of second quarter. Offers came in quicker, with a much lower average days on market than the two previous years. Offers were closer to asking price, with terms and conditions slightly favoring the seller. This is, of course, an average – not true for every single offer that was written and presented. This trend continued throughout 2015, with the average sales price creeping up throughout the year. Good news, as it didn’t send home prices through the roof, but rather allowed them to recover at a nice, steady pace.
Foreclosures all but disappeared from the market, as did short sales. Traditional sales were rough for several years, as sellers had to compete with the foreclosures in their neighborhood, typically harboring a much lower sales price than the homeowner that wasn’t underwater. With those cleared from the pipeline, it allowed for the regular sales to determine the average sales price once again. Without the ability to purchase properties for rock-bottom prices, the investors weren’t as prevalent in the market. With investors in the game, usually paying cash, many of the foreclosure sellers opted for this avenue, as opposed to dealing with a buyer procuring a loan. This allowed for sellers to compete against each other, often resulting in multiple offers and sometimes, a sales price that was higher than asking price.
Homes appeared to be in better condition. When the buyers were purchasing foreclosures, many had the stigma of being a “fixer upper.” Sometimes this was true; sometimes it was not. However, with the higher asking price, the buyer rightfully expects the home to be in good condition. Sellers, knowing they were going to get more for their property, put more effort into the home before even listing it for sale with paint, minor repairs, landscaping, etc. It wasn’t so competitive that buyers were just simply accepting the home in “as is” condition. They were expecting to get what they paid for. And when you’re paying top dollar for a property, you expect it to be ready for you to move in.
Interest rates remained low for the majority of the year, enticing consumers to own versus rent. Credit factors loosened slightly, making a home loan more attainable. It’s certainly not as easy as it was several years ago, nor do we ever want it to be like that again, but it’s also not as difficult as it was right after the crash.
2015 was a stable, steady year. Although sellers enjoyed slightly higher sales prices, buyers also had much, much more inventory from which to choose. Offers became competitive, but not ridiculously so. 2016 should offer much of the same. If you enjoyed 2015 real estate wise, you’ll likely enjoy this upcoming year as well, maybe even slightly more. FBN
By Sherri Monteith