Let’s talk about the Market
When a buyer asks a Real Estate agent “how’s the market?”, our first question should be, “which market are we talking about?”. Even within Sonoma County, each individual city has very different real estate dynamics that matter very much when considering things like which home to buy or if it’s a good time to sell your house. Understanding the local market trends and knowing what to look for can make your home-buying or selling journey smoother, more enjoyable and most importantly, more informative.
Key Factors to Consider When Buying a Home
Market Conditions
What are “market conditions”? Pay attention to key indicators such as the average home price, days on market, and inventory levels. Understanding these factors will help you to make informed decisions about the best times and locations to buy. Having this knowledge can sometimes prevent a buyer from overpaying for a property or missing out on a great deal. This is when having a local agent comes in handy. Your agent should be able to tell you the facts on your preferred market.
I’ve broken down some information on the key ingredients to home buying and the “why”:
- Inventory: How many homes are for sale in your preferred market? Knowing the total inventory helps your agent understand the supply side of the market. This insight is crucial for determining whether it’s a buyer’s or seller’s market, which can significantly impact your buying strategies, offer price, and knowledge on the property for the future. But it also helps assess the competition. This allows your agent to identify which properties are priced competitively and which might be overpriced, helping you make more informed offers. This is such incredible knowledge to have if you happen to be in a market that tends to have multiple offer scenarios (hint hint…many markets within Sonoma County).
- Days on Market (DOM): The average DOM provides what I like to think of as a snapshot of the market’s health. A low DOM typically indicates a seller’s market with high demand and quick sales. However, a high DOM could suggest a buyer’s market with a slower sales rate, potentially meaning deals for buyers. If homes are selling quickly, your agent needs to provide this information to you so you can decide your dollar amount. With multiple offer scenarios I like to remind clients how important it is when considering your offer price. Find what the property is worth to you down to the penny. This way if someone outbids you, you can move on confidently knowing that property was not the one for you simply because you would not have purchased it at the price it sold for.
- Home Features: Most homebuyers have a clear idea of their essential features, such as the number of bedrooms and bathrooms, yard size, and proximity to work. However, attending as many open houses as possible in the area you’re considering can help you refine your preferences further. This process not only solidifies your “must-haves”, but more importantly helps you identify your “deal-breakers.” Sometimes you can’t see those until you experience them. Be picky. Buying a home is the most vulnerable purchase most will make.
- Future Growth: Research potential future developments in the area for things like new schools, shopping centers, or bigger transportation projects. These can impact property values, (sometimes more so than that pool you’re wanting).
- Inspection and Condition: Always get a thorough home, roof and pest inspection to identify any potential issues with the property (if seller does not provide). This can save you from unexpected large expenses down the line. But in the moment, it can also save you from offering higher on a property you think you want. There’s nothing worse than closing an escrow and finding out six months later that your roof is at the end of its life. An average roof repair in Sonoma County can be thousands of dollars. If known ahead of time, this is something a strong agent can potentially find a way to write this into the offer.
