Year end strategies for home buyers and sellers

Navigating the Real Estate Market...Q4 Strategies for Home Sellers and Buyers

As we approach the year-end, it is essential for home sellers and buyers to understand the current market trends and adjust their strategies accordingly.

Over the past six months, we have observed a steady decrease in supply, with active properties becoming less available, while demand has remained stable. This dynamic creates unique opportunities for both sellers and buyers in the current market climate.

Here is what home sellers and buyers need to know to make the most of the final quarter of the year.

For Home Sellers: Q4 Strategy

Testing the Market with a New Listing
   - Now is an opportune time to launch a "Coming Soon" and limited MLS trial. Listing your home on the MLS between mid-November and mid-December allows you to test and evaluate the market to gauge buyer interest. This period lets you fine-tune your listing price based on the initial response.

Taking a Holiday Break
   - After the trial MLS listing period, if you have not received an acceptable offer consider withdrawing your listing from the MLS during the holiday season, typically from mid-December through mid-January or early February.

Return to the Market with an Updated Approach
   - By early 2025, you can relist your home with a new listing agreement. This 30+ day pause can create a fresh start when you re-enter the market as MLS days on market (DOM) resets to zero with a new listing agreement.

 You can enter the market with an adjusted strategy based on feedback gathered during Q4. This could include a price adjustment or an enhanced marketing effort, making your property more competitive and attractive to prospective buyers as the new year begins and before the inventory increases in spring with newly listed competing homes for sale.

For Home Buyers: Q4 Strategy

Take Advantage of Less Competition
   - With fewer buyers actively searching due to seasonal factors, now can be an ideal time to explore available properties for sale. Stable home prices and a slower market pace give you the time to make a thoughtful decision.

Motivated Sellers and Possible Concessions
   - Sellers looking to close deals before the end of the year may be open to concessions, such as covering part of your closing costs. This can ease some of the upfront expenses associated with buying a home, making this period advantageous for budget-conscious buyers.

Preparing for Interest Rate Uncertainty
   - With recent election results creating potential policy shifts, the real estate market could experience changes in the coming months. While mortgage rates have recently increased slightly, future adjustments to the Federal Funds Rate may impact consumer borrowing costs.

Buyers should consider locking in rates now to mitigate the risk of future increases, especially if policy changes from the new administration influence the economy with inflationary conditions affecting the bond and mortgage market.

Real Estate Market Post Election Sentiment
The recent presidential election has brought significant movement in financial markets, with a post-election stock rally as optimism grows around potential tax cuts and deregulation.

Here is a snapshot of current trends:
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Stock Market Performance - post-election: last week the Dow rose 4.6%, the S&P 500 was up 4.7%, and the Nasdaq increased by 5.7%. This optimism was driven by expectations of an economic boost.

Federal Funds Rate: The Federal Reserve’s recent rate cut of 0.25% has brought the current rate to a range of 4.50%-4.75%. Another quarter-percent rate cut is expected in mid-December, potentially lowering rates to 4.25%-4.50%.

Mortgage Rates: Mortgage rates have seen a slight increase, with the national average 30-year fixed rate inching up by 0.05%.

Economic Indicators to Watch
Buyers and sellers should keep an eye on key economic indicators in the coming weeks, such as mortgage application rates, inflation reports, and retail sales data, which will reflect consumer confidence and spending trends.

The Federal Reserve’s ongoing stance on interest rates and new policies from the incoming administration will play a crucial role in shaping the real estate market. Further Fed actions could influence consumer lending rates in the coming months.

Final Thoughts

For sellers, the end-of-year season provides a chance to position your property strategically, leveraging the quieter holiday period to take advantage of fewer competing homes for sale.

Buyers can benefit from less competition and potentially motivated sellers willing to offer concessions.

Whether buying or selling, monitoring economic signals and being ready to adapt is essential to making the most of the current real estate climate.

Pete Sabine
Real Estate Consultant
Call or text 925.787.2548
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