As a real estate investor in 2018, you have access to a wealth of data that would make investors from previous generations green with envy. That’s the good news. The challenge is you’re busy enough managing all the properties that you own—and so what you really need is professional analyses of this data that:
- helps you to grow your business
- allows you to increase your profits
- gives you insights into how to price the homes you sell
- guides you when you want to make offers on properties
Those are exactly the areas where we excel—and so, to help, we’ll share an overview of what we see in the market today. We’ll then share residential real estate trend data from August 2018 that played a role in our analyses and provide recommendations on what makes sense for you to do next, given today’s market conditions.
Residential Real Estate Investing Overview
Market fundamentals are still strong and the demand for homes is still high. However, at least one of the following is also true right now:
- demand levels are leveling off
- available inventory is more than what can currently be absorbed by the market
Now, of course, is the time when more inventory traditionally will hit the market, with people often waiting until summer is over before putting their homes up for sale. But, today’s inventory buildup seems to be more than just that.
Here’s another factor to consider. Unlike some other times, it isn’t spec buying that’s driving up home sales. Instead, it’s people who are buying, which has been driving up prices. And, it may be that we’re reaching the point where affordability is stretched as far as it can currently go. When home price increases outpace income increases, this is a situation that you’ll need to strategically address, because prices can only go as far up as what people can afford if you want to actually make a sale.
Overall, it’s our belief that market conditions are not worsening. Instead, appreciation is slowing and leveling off, something that’s important to keep in mind when setting prices.
Now, we’ll share relevant data and then include recommendations on what, as a real estate investor, you should consider doing next.
Median Home Sales Prices
Using single-family homes in Florida as a benchmark (it’s fascinating how Florida real estate serves as a microcosm of real estate across the entire United States!), here is some data:
- August 2018 median home sales price: $254,290
- August 2017 median home sales price: $240,000
- Increase from August 2017 to August 2018: 6.0%
After noting the increase, it’s also important to state that median home prices appear to be flattening.
Another key area to monitor is pending home sales, and here is data:
- August 2018 pending home sales: 26,239
- August 2017 pending home sales: 26,943
- Decrease from August 2017 to August 2018: -2.6%
We also closely monitor home inventory levels, and here is that data:
- August 2018 home inventory levels (active listings): 90,586
- August 2017 home inventory levels (active listings): 86,648
- Increase from August 2017 to August 2018: 4.5%
Recommendations for Residential Real Estate Investing
Now is the right time to evaluate your property valuations and pricing strategies. Prices are levelling off (which may simply indicate a break in the action) and may slightly come down, especially in areas that have been really hot, those that have been experiencing steadily rising home prices.
In response, we encourage you to look at the housing inventory you’re currently holding and look at how you’ve priced those homes, including but not limited to ones that have been sitting on the market for six months to a year. Are you using the same pricing and marketing strategies as you did a year ago? If so, it’s important that you actively review each of these homes and re-evaluate pricing based upon today’s market conditions.
So far, the spread between the listing price of a home and its actual sales price hasn’t shifted as much as you might expect, so this is one area where we intend to be especially watchful.
How Resolute Asset Management Can Help
The Resolute team is highly experienced in helping residential real estate investors accurately value their holdings, so our clients can make the best decisions about their assets. Our clients have holdings across the country and, for each of them, we provide comprehensive information about properties held, offering insights that go much deeper than simply sharing the value of that property. We provide context on the neighborhood and city, as well, so that the broad and accurate data you receive will allow you to make informed decisions on each of your real estate assets.
You can find more information about our valuation services. We invite you to contact us online or by phone at (352) 414-5293 so we can review your portfolio and provide recommendations on pricing strategies based on current market conditions.