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Your Home: Opportunities in upper bracket real estate

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Chad_TaylorBy Chad Taylor

As the market shifts, opportunities are created. This week I wanted to share an observation about the upper bracket real estate market in NEJC. By upper bracket, I am referring to the $500,000-$1,000,000 price range.

2018 continues to surprise us, and this month we have seen quite a change in the upper bracket market. As with most price ranges, February of this year appears to have been the market peak for the year in the 500K+ range as well. For example, the week of February 26, 2018, almost 1 out of 5 homes went under contract. That is a great sales absorption rate for the upper bracket.

If you observe the graph above you can see that since that week in February the trend line shows that the number of homes to go under contract has been dropping. Check out the week of May 14th- 0% of the homes in the upper bracket went pending that week. To use exact numbers, that is 0 out of 65 homes.

So what does this mean for the upper bracket market?

Well, for buyers in the upper bracket market it means that you will have more options than you have had in quite some time. We are already seeing price adjustments taking place on a regular basis, so clearly the increased level of competition for sellers is having a an impact on pricing. Lower prices coupled with low interest rates is a good combination for a buyer today.

For sellers in the upper bracket, the message is this- pricing is everything. And, as you can see from the graph, a seller cannot hang their hat on home prices from even two months ago. Reason being, the demand for upper bracket housing was higher a couple of months ago than it is now which allowed for higher sales prices.

If you look at the chart below, you can see how to compete in a more balanced real estate market, which is where we are headed. In a balanced market, buyer nor seller have the upper hand. It is a level playing field.

In order to compete as a seller in a balanced market, you not only need to be in in top 1/3rd in overall condition, you must also be in the lower 1/3rd when it comes to price. This combination allows you to be in the market.

No man’s land is when you are on the market and receiving showings, but no offers. Out of the market is when you are on the market but not receiving any showings. Either one is a bad place to be.