“Knock has developed six predictive algorithms to determine how much our Home Trade-In customers’ homes will sell for and when, and we’re excited to bring these insights to consumers nationwide,” said Sean Black, cofounder and CEO of Knock. “By applying these algorithms, which we call Knock Deals, to the top U.S. markets, we hope to help more home buyers find and act on the best deals, and increase overall market fluidity.”
While the rate of home price increases has begun to slow, they are still up 5.1 percent year-over-year, according to the S&P CoreLogic Case-Shiller Indices. As prices have gone up, so have home sellers’ expectations of their home values. When sellers price homes too aggressively, they often sell not just below their original list prices, but below market value because they sit on the market for a longer period of time, according to Knock. Those homes are the most likely “deals” for homebuyers, according to the model.
The model predicts that 77.57 percent of listed homes in the Charlotte metropolitan area will sell below their list price in the first quarter of 2019, with a discount compared to list price of 1.75 percent on average. Just 10.82 percent of homes in the Charlotte region sold for more than the list price, and Knock predicts that number will be even lower in the first quarter of 2019, at 7.29 percent.
Knock’s data ranks the Triangle at 33rd of the largest 45 metropolitan service areas, with 73.85 percent of homes predicted to sell below their list price in the first quarter of 2019. Average savings as a percentage compared to list price for home transactions in the Triangle were just 0.48 percent in 2018, indicative of a fairly competitive market, but savings are expected to increase in the first quarter of 2019 with an estimated discount of 2.54 percent against list price. While nearly 17 percent of Triangle homes sold over list price in 2018, Knock expects under 10 percent of homes to sell for more than list price in the first quarter of 2019, predicting a bit of a slow down in the market.
Nationwide, Knock found that 62 percent of all homes sold below their list price through December 1, 2018, with more than half selling more than 2 percent below their list price. Their model predicts that the average savings as a percentage of the list price of homes that remain on the market into 2019 nationwide will be 4 percent, with the average savings on homes that have been on the market for more than 60 days at 7 percent.
It’s hard to time the market, but the worst months to find a deal in either region were in May and June. The best month of 2018 to find a deal in Raleigh, Durham, or Charlotte was in November, however, if the predictions are accurate, homebuyers may yet secure a good deal in December 2018 or in the first quarter of 2019.