The Cost of Waiting to Buy
This market is crazy! Prices are climbing high and buyers have flooded the market with lots of cash and escalation clauses. It's a little wild and can be a little baffling. Some of my recent clients have put in offers for up to $10k-20k above asking and they are still losing out. Unfortunately, this is becoming increasingly common as inventory is reaching record lows. In other words, there just aren't enough homes for how many buyers are looking! So buyers are raising the stakes and it's becoming costly. Oddly, it all makes sense when we start looking at the numbers .
So what does it cost for a buyer to wait? Surely it can't be THAT costly....or can it?
Let's review a few statistics that will provide insight as to how the market is currently measuring up vs 2017. All data is from MLS and is specific to the Richmond Metro. **If you're a data nerd be sure to check out the full data breakdown at the bottom of the post.
Months Supply of Inventory:
This is how many months it would take to sell all homes on the market at the current pace and is one of the primary measuring tools in determining if it's a buyers or sellers market. Anything less than 6 months is a sellers market. For a buyer this change means FEWER homes are on the market and there is more competition for each home. The chart to the right shows just how low inventory is compared to previous years.
Change: -25.71% (that's 25% FEWER homes compared to this time last year)
Averaged Closed Price:
This is the average sale price of a home in the Richmond Metro. This is different from the list price and represents the actual purchase price. As this number goes up buyers are paying MORE for a home. On average buyers are paying $10,000 more for a home in 2018 compared to 2017.
Average Days on Market to Sale
This is the average number of days a home is on the market prior to going under contract.
As the average time on market drops buyers are forced to act more quickly and everything becomes much more stressful. An average of 29 days might seem like a long time but in realty "hot" areas to buy see averages of under 10 days. This statistic includes homes that sit on the market for hundreds of days which is why it skews the average to be so high.
2017: 35.75 days
2018: 29.71 days
It can be costly to wait!
Take a deep breath as the conclusion is rough: There are fewer homes on the market selling more quickly and for higher prices! We haven't even begun to talk about rising interest rates. Have questions or comments? Leave a comment or message me at bryson at buyinrva.com.