Everyone’s favorite question is, “Mariam! How’s the market?!” I hate to break to you, but the answer is, “Weird but kind of normal?” At risk of sounding like a broken record, I'll say again that the market is normalizing, not crashing.
I’ve received bottom-feeder grade offers on all my listings, which are then followed by outlandish “repair” requests based on virtually nothing. In-turn, my buyers are wanting to submit very low offers, and are in utter dismay when the seller does not accept their terms. After being in the trenches with both my sellers and buyers, I have this explanation to offer you.
A tale as old as time, and since the days of
W.R. Hearst, news outlets make big money by selling copies and clicks. The highest click and view rates occur when there’s a big fat story, true or not. You’ve seen and heard some form of “the market is crashing” in headlines and reporter rhetoric since around May 2022. Months of the same false story has made it true in the minds of the buyers that are currently on the house hunt.
Now I will say that during the October through end of December time window, the market was much softer. Interest rates were higher just a short time ago, which greatly affected buyers and their purchasing power this past fall. And now, since just the fall, interest rates have dropped and leveled off enticing buyers to get back out there and write offers. However, after months of the ‘end of world’ rhetoric pushed by media, buyers now think they are able to wheel and deal and that is just simply not the case.
While, thankfully, we are not seeing offers $20,000 - $200,000 over list price first day on market… we are also not seeing sellers accept offers in the opposite direction. I have a vast network of agent friends in this city, and all around the country, and we are all experiencing the same thing on what price the buyer and seller end up agreeing on: ~near or at list price (+/-) less than ~4%. Other items the agent community is reporting:
- 1-30 days on market becoming more normal.
- Possibly a price reduction.
- After a price reduction, almost an immediate offer submitted buy a buyer who has been watching.
- Seller willingness to either give a buyer credit, or accept a lower sales price after spending some time on the market.
- But also unwillingness from the seller to cut price before spending adequate time on market.
- Extreme buyer sensitivity to pricing and condition. If you're selling this year, make sure your house is in tip-top shape!
- Buyers wanting to put in low offers to the tune of $10,000 - $80,000 below list price and are upset when the seller opts to not even counter.
- Staunchness on pricing from builders on their product that was under construction during the “great supply chain fiasco” we all suffered through 2020-2022.
- The need to bring back staging in our listings. Jan 2020 - April 2022 moved so fast that a lot of agents did not need to stage to garner multiple offers. Staging is becoming much more important in our normalizing market.
In short, buyers have been led to believe they will be able to get a heck of a deal. While they will be able to get much more favorable terms this Spring than they were able to get last Spring, there are no rock bottom deals out there. If it’s a ‘deal’ - then the buyer most likely will be the one carrying all the risk and liability, because the only ‘deals’ out there are properties that no other buyer wants to touch. (think previously flooded properties, houses on terrible streets, stucco issues, or houses with the walls cut out because of busted pipes - no thanks!) If the house is exactly what you're looking for and its not egregiously overpriced, there is no shame in offering full list price to secure your unicorn.
With other economic factors in play, there certainly will be opportunity out there to acquire and hold for future profit - but there won't be much turn and burn out there for the average buyer. We are entering the beginning of the peak Spring market that is historically, year over year, more intense than the rest of the year. If you do not want to contend with multiple offers, now is literally the time to get something under contract. And as almost always, cash still remains king.
Per usual, I have plenty more to say. Call me or hit reply if you want to talk shop further. If you're ready to make a move, let's put together a game plan.
