Seriously, did you feel that? The real estate market here in Chico just shifted! The question is constantly asked, “How’s the market?” When you’re a Realtor, it’s a more common topic than the weather! For the last several years, the story has been low inventory, low rates and rising prices. Sellers have been able to price their home above the last sales comp and still get multiple over asking price offers. I would describe this past spring and summer as a FRENZY. A new listing would hit MLS and within hours the showing requests would roll in and there be multiple offers with only a few days on the market.
Schools started and then, SHIFT! Within a matter of weeks, it felt like the brakes were being pumped. We had sellers in full blown panic because their homes had been listed for 3 days with no offers! As Realtors, we started speaking to our colleagues and lender partners, and sure enough, they are feeling it too. The market is absolutely cooling. The appointments are still rolling in and with all of our listings this fall, the offers are coming… it is just taking 2-3 weeks instead of 2-3 days. For the first time in a while, we are seeing price negotiations.
I don’t believe that we are going to have the bubble burst like it did in 2007, but I would say the feeding frenzy of buyers has subsided. The expert economists at the California Association of Realtors have released their 2018 economic forecast and they are predicting conservative growth: 1% increase in sales volume, a 4.2% increase in median home price and interest rates inching up to about 4.3%. This growth feels realistic. Compared to the 1% per month appreciation we’ve been seeing, 4% annually is going to feel very flat. Rates are still awesome and with a more balanced market, 2018 is shaping up to be a great year to make a move. If 2018 might be your year to buy or sell, give us a call. We’d love to help you plan!