I’m excited to share the OKC Metro Market Update because things are really moving and shaking in the OKC Metro. The Real Estate market this past month (April 2021) was incredible! It’s definitely still a Seller’s Market with properties continuing to fly off the shelf!
OKC Metro Market Update: Average Price
For this edition of OKC Metro Market Update: April 2021 Results, the average sale price of homes and properties in the OKC Metro areas I serve increased by approximately $2K. And I am not surprised. The current situation is that many sellers are receiving multiple offers on their homes. What multiple offers oftentimes do is drive up the offer prices on homes. Currently, we are seeing that most home owners are receiving full price offers or close to full price offers. We are also seeing, many times, offers above the asking price.
Is Above Asking Better?
This, of course, is awesome for sellers. It’s particularly awesome if it’s a cash offer! Why? Because sellers do not have to worry if their home will appraise for the offer price. And that is because most of the time you don’t need to do an appraisal with a cash offer.
Now, if the offer is above asking, then sellers need to wait and see if the appraisal will support the offer. If the appraisal is below the offer (which is technically now a contract) price, banks will not lend a sufficient amount of money on a property to cover the entire offered price. In other words, banks are not going to rely on a price the consumer threw at the sell just to win the house. The home has to be worth or valued at that price. Negotiations between buyers and sellers in these instances, however, could lead to some sort of compromise so that it is a win-win for both sides.
For example, if the list price is $250,000 and the buyer offers $260,00 but the home only appraises for $258,000, the seller may accept the offer price. However, the buyer my need to pay the $2,000 in cash since that amount cannot be funded by a bank loan. Or, the buy may reduce the price to $258,000. Another option is the buy and seller split the difference where the buyer offers an additional $1K in cash and the seller reduces the price to $259,000. And all this back and forth can get complicated quickly. That is why you need a realtor, LIKE ME, to help you navigate through all the back and forth negotiations. And trust me, emotions can get high and you will need a measured, steady professional like myself to help you get the best deal possible.
OKC Metro Market Update: Days on the Market
For this edition of OKC Metro Market Update: April 2021 Results, the Days on the Market average for the areas I serve dropped from 27 days to approximately 22 days. 20% & that’s HUGE! I can’t stress enough how significant this is from one month to the next. These results also play into the larger story of being a seller’s market. Let me explain further.
Available Buyers for the Price
The number of days a house is on the market can tell you a part of any property’s story. Homes can sit on the market for months and months. Sometimes, it’s just simply that a certain price point has few buyers. For example, in this neck of the woods, a $3M home correctly priced could sit on the market for several months. This is because the number of buyers that can afford a home with that price tag is just simply few than the number of buyers that can afford a $300K home. It somethimes takes time for buyers in that price point to be found or connected with the property.
Sellers Driving the List Price
A property can also, and oftentimes, sit on a home because it was not correctly priced. How does this happen? Well, it there could be a few different reasons. Sellers may be very assertive with their real estate agent in what they want to list the price for, and if the agent is inexperienced or lacks the confidence and skills to explain to assertive sellers why the price point is too high, creates a disaster. The house sits too long. The seller blames the agent. The inexperienced or unassertive agent is unable to properly explain with comparables why the home is over priced. Ultimately the contract expires and the sellers find another realtor who may likely do a better job of educating and negotiating with the sellers to correctly price the property.
The other circumstance could simply be that the agent did not properly research and analyze the market and ultimately reached a fair market price based on bad comps (comparable homes in the area that have recently sold). Now, obtaining good comps is no piece of cake either. The agent has to find recently sold homes in the same area with similar features and amenities and sometimes it is difficult to find recent sales or home in the general area.
Nonetheless, accurate comps is what really drives listing a property correctly. So looking at days on the market for these recent results, what is a 20% drop in the Days on the Market telling us? Definitely not that homes are being overpriced. And take it from me, most agents will almost never under price a home unless that agent and the sellers have a strategy to create multiple offer situations. In this case, at 22 days on the market is quite literally showing us that house are “flying off the shelf!” And why is that? Well, here is where I circle back to the beginning.
There are more buyers than homes available. When this happens, you see several buyers making offers on a home. Some of those buyers are so frustrated and desperate they either make offers as soon as a property lists, offer more than the asking price, or both. This, my friends, is a seller’s market. When there is a seller’s market, one of the clues is a declining Days on the Market as a metrics.
OKC Metro Market Update: Active Listings
An Active Listing is the number of homes on the market and available for purchase. For this edition of OKC Metro Market Update: April 2021 Results, the Active Listings dropped by about 10-12% to 932. Now, that’s still a lot of available properties on the market for the OKC metro area. But again, there are just simply way more buyers lately. And 932 is just not cutting it, in order to keep a balance in the market.
OKC Metro Market Update: Homes Sold
The Homes Sold metric does not require a lot of explanation. Like it sounds, it is literally the number of properties sold. In this metric, we also saw an approximate 10-12% decrease. Under normal circumstances in the market, and if only looking at that indicator in a silo, one may think that properties are not selling with a drop from the prior month. However, this metric needs to be compared to Active Listings. There is a correlation here. With overall fewer properties listed, consequently, there will be few properties sold.
But looking at the raw number of 1578 tells you there are still a lot of properties out there to be had. This is a good thing. There shows movement going on in real estate. The issue again goes back to the relationship between the number of homes available and the number of buyers out there fighting for those properties.
OKC Metro Market Update: April Results Conclusion
So the bottom line here is properties are still going on the market, which is a good sign. Homes ARE being listed and buyers are definitely buying them. So for now it appears we will continue to see a seller’s market until the number of properties listed starts to outpace the number of buyers in the market.
So my advice to you is:
- If you’re a buyer, be open to offering asking price. Or over asking price and making decisions quickly since houses don’t last long. Also you could take a break from home searching and wait until the market balances out and then resume your effort.
- If you are considering selling, now is a great time to sell your home. Also you may consider selling your rental property if the numbers work in your favor for the short term.
- Whether you decide to buy or sell in the coming months, I CAN HELP YOU!
I’m here for YOU….
At this point you’re aware I’m a Realtor. I’m also co-own OKC Metro Group, an OKC Metro real estate company. I have years of investing, flipping and remodeling under my belt and have seen a lot happen in this market. If I can be of help with a strategy, questions or a listing, please get in touch!
You can find me right here next month for the June issue of the May OKC Metro Market Update.