Tough Market or Tough Love?
"Why scare Buyers?" the email said. "I've worked on Wall Street for 25 years and markets correct . . . " (Yes they do.)
For the record, "scaring" Buyers or Sellers is never my intention (speaking honestly and openly with them is).
Listen; everyone's entitled to their own opinion. In fact, I welcome friendly/courteous/respectful debate but if Realtors® (or stock brokers) had a crystal ball that could accurately project future market trends, there'd be NO debate, and this stuff would be easy (it's not).
As no one can actually see the year ahead, ANYONE'S projections are a guesstimate at best, including the opinions of well-heeled, well-educated, Wall-Street analysts who are paid STACKS of money to prognosticate on such important financial matters. In other words, NOBODY definitively knows what happens next, which means Buyers and Sellers need to work in TODAY'S marketplace - not last April's.
Is it a tough market or tough love I'm preaching?
However, I think Sarah and I wouldn't be doing our jobs correctly if we stuck our heads in the sand and pretended that the market isn't changing rapidly (it is). However, timing the market is an impossible task. Homeowners are going to buy and sell as life dictates, regardless of the interest rates, the stock market, or the cost of gas, BUT how they go about transferring real estate is going to be different.
Last week, I represented Buyers who submitted an offer on Wednesday, and by the time it was accepted on Thursday, their rate had gone up a full percentage point! Keeping the deal together required securing a new lender in the 11th hour and asking the Seller for additional time to close. As they were the only interested party, and the house had sat on the market longer than was comfortable, the Seller took the pragmatic approach and wisely allowed the Buyers more time. (Thank you.) In exchange, the Buyers will carry the Seller's costs for the extended period. (That's only fair.)
Not for nothing, but both sets of Buyers I successfully put into contract last week wrote below the list price with contingencies in place. (Why concede your due diligence if you don't have to?) AND both negotiated back and forth before coming to a meeting of the minds. Welcome to the world of real estate 101. (I remember you well.)
In other words, we're back to a market with more give and take, more negotiations, more credits, and more parity between Buyers and Sellers, and that makes purchasing a home a more equitable journey in many respects (not a cheaper one, but less one-sided for sure). BTW, There's an argument to be made for buying a less expensive home now and refinancing when rates go down . . . .
But at the risk of delivering "tough love," and upsetting last week's well-intentioned penpal, here's the new reality: In Alameda County, across all price ranges for detached, single-family homes, 50-67% of active listings have been on the market for more than 30 days. Between 7-10% have undergone price changes in the past 30 days.
Similar findings play out with respect to condos. Across all price ranges, 40-55% of active listings have been on the market for more than 30 days, and 5-10% have adjusted their prices downward.
Which is to say that if your property isn't flying off the market, you're not alone. This is about adjusting to the new market realities which demonstrate that prices are softening at all price points and in all regions (even here in Piedmont). Consequently, if the goal is to sell your home, you may need to adjust your expectations accordingly.
Tough market? Certainly tougher for Sellers who, frankly, have had it pretty great the past several years, but perhaps a real opportunity for Buyers??? (Absolutely.)
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Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.