I am sure that everyone has heard that the real estate market in most of the country has been booming. Here in Holyoke I would not use the word 'booming' but it certainly has been very busy. 2017 had the most single family homes sales, 211, since I have been keeping records starting in 1994. Last year, 2016 was the second highest volume with 199 sales.
Values have gone up again. Average sale prices have risen to $191,764 from $178,717 which is a 7% increase over 2016. Median sale price rose 10% over 2016 to $183,250 from $167,500 last year. Statisticians say that median is a more accurate reflection of prices since it is not skewed by a few high priced sales. Either way we all can see that prices have gone up fairly significantly in 2017.
There were few house on the market at any given time. In the past, 70, 80 or more single family houses on the market was not unusual. Last year 20 to 30 homes on the market was more of the norm. Sellers were seeing multiple offers on their homes. Sometimes mini bidding wars occurred because buyers had little to choose from. Good houses were selling very quickly and buyers did not want to miss out. Some were bidding too much, $5,000 to $10,000 and even more over what the house was worth.
This caused some problems in the market. When bidding high, buyers run the risk of not having the house appraise for the sale price. If it does not appraise at or above the sale price, than many buyers will not get the loan since they are usually borrowing 95% to 100% of the sale price. When this happens the buyers are forced to either not buy the house or go back to the seller to renegotiate the selling price down to the appraised value. Some sellers would cooperate but others were adamant that if that buyer won't buy their house, then there is a list of other buyers that will. Sometimes this works out for the sellers because maybe another appraiser will appraise the house for a higher amount. But other times this strategy backfires because the next appraisal, for the new buyer, comes in at a similar value or even lower than the first appraisal.
Remember the old adage, 'a bird in the hand is worth two in the bush'? Well this could apply in these situations. If only the seller worked with the first buyer and renegotiated the sale price they would not have had a delay and certainly a lot less anxiety over the sale. Moral of this story- Don't be greedy it may not work out the way you want.
Since we are well into 2018, I will give you a quick update on the market this year. The first half of 2018 saw 98 sales with an average sale price of $216,724 which is an increase of 13% over 2017. The median price is $203,000 which is an increase of just over 10% over 2017.
Sorry about all the numbers but it is difficult to write about changes in the real estate market without using numbers. I hope everybody is having a good 2018 so far and my best for the rest of the year.