There is one indicator that has a big impact on the prices that buyers will be paying in the future, and is commonly overlooked. And, with improving real estate market conditions across the country, it’s an important one. That question involves what is happening with new listings that are coming to market. They should be tracked carefully by buyers, but not for the reason you may think. All buyers want to be made aware of any new listings that come to market. Just as important to every buyer should be what the prices are for each new listing in the area where they want to buy. Let’s consider the 3 possibilities:

 

1. New Listings prices are increasing –  Buyers should be very concerned. Think about the immediate impact these new prices will have on present sellers. If they see prices of new listings rising, they are likely to question letting their listings sell for less money. Negotiations are likely to be much more difficult with existing sellers when this happens.

 

2. New Listings prices are the same – Buyers should be mindful of the window of opportunity they have with sellers.  New listings at similar prices to existing listings is an indication that sellers who are waiting for prices to recover are likely to have to wait a good deal longer, because short-term prices are indicated a flat market. This is a point that can be used during negotiations with sellers, but buyers should be mindful that this window of opportunity may soon close as more positive news about the real estate market recovering continues.

 

3. New Listing prices are declining – This is unlikely to be happening except on very expensive properties, but if prices are lower, this should be used by buyers to predict how much the decline will be in the future. By pointing out the risk of prices being lower, the buyer can reinforce that it makes no sense for them to take on the risk the seller now holds of prices dropping.