We have had many conversations with buyers wondering if the past winter months represented the market lows … an interesting question, to be sure. From an asking price standpoint, we think the answer is a reasonable “no”, as they will likely continue trending lower. The more interesting question is: will closing prices follow suit? In other words, will the spread between asking and closing prices remain the same for some time or shrink as asking prices drift down? A quick look at the average spread over the last few months shows no discernible trend to guide us.
One interesting theory is that although the market may “look” cheaper going forward based on lower asking prices (the visible, surface data that the media generally references), the degree of negotiation leverage that buyers had in those scary winter months will diminish. As always, the true picture of the market will lie in closing prices, which we will be diligently watching over the coming months.