MARKET SHIFT

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When the COVID-19 pandemic hit a little over two years ago I do not know of one person in the real estate industry who would have predicted what we have seen since that time. As almost anyone with any knowledge of the industry knows, prices have soared over the last couple of years. It has been a long, strong sellers market with low inventory levels, high buyer demand caused in part by the pandemic and historically low mortgage rates. But I can see from my first hand experience that a shift is currently taking place. The playing field is leveling.
Two summers ago when I listed a home in my neighborhood we had close to 100 showings over the course of three days. There were seven or eight offers made on the property. All of them were over asking price.

Last summer, just a couple of blocks away I listed another neighbor’s home for sale. We had 50 to 60 groups come in our first weekend. We received six offers and three of those offers were over asking price. When I listed a home in the same neighborhood this summer we had about 25 showings over the first weekend. There were three offers, all over asking price. Fortunately, a seller only needs one solid offer from a well-qualified buyer to sell their home.

But clearly there are changes taking place in the marketplace.  It was clearly a very distinct sellers market for about 2 1/2 years and it is still a great market to sell a home in. Values have increased drastically and many well-qualified buyers are out looking for their new home.

Frankly, many buyers were getting pushed around the last couple of years and I think those days are behind us. Personally, I also think this shift is for the good overall. Inventory levels have increased slightly. Home prices have remained steady. Reviewing the MLS one can see that many listings are having negative price adjustments. There was a lot of over priced inventory out on the market and those sellers are needing to adjust in order to find buyers. But it won’t help their cause when their listings will reflect 30, 45 or 60 days on market. This is another reason why pricing your home appropriately is so important when selling. Buyers are going to be asking themselves “what’s wrong with this property” when the only thing that’s wrong with the property, most likely, is that it was overpriced.
But anyone thinking of selling their home should not despair, just like someone looking to buy should not be in despair just because mortgage rates aren’t 3% anymore.

A seller with realistic expectations does not need 100 showings and 10 offers to sell their home. As I said, they just need one solid buyer with a fair market value offer with solid financials and they’ll provably be accepting an offer fair higher than they could have imagined just a couple years ago.”