Sellers have been riding high the past couple of years having to make hardly any repairs, give no concessions, retaining post-possession for free and pocketing some hefty proceeds upon closing. Well… times have changed and so has the Real Estate Market!
Fortunately, most home owners are still sitting on a large sum of equity due to the crazy appreciation gains, despite lowering prices over the past 6-months. That means it can still be an okay time to sell, but expectations need to be re-calibrated. Chances are you’ve seen & heard some crazy headlines, which are usually only part true.
The Truths:
- Inventory has risen substantially, giving more selection to buyers and competition for sellers.
- Mortgage Interest Rates have gone from approximately 3% to start the year to over 7% at various times recently, which means a higher cost to purchase for buyers, and that makes them think long & hard before submitting an offer.
- Days on Market is no longer 6-hours… most are on the market 30-60 days right now and historically this is typical.
- You need an experienced Realtor/Broker now more than ever. Over 90% of current Realtors have never been in a market like this… the 10% who have are very valuable. (I am in the 10%)
- We are in the 4th Quarter of the year… this means almost anything can happen, but there is a seasonal slowdown anyways for most years. Holiday time brings out fewer new buyers and many push plans until after New Years.
In today’s society, consumers have so much information at their fingertips, which can be a double edged sword. I often refer to the “Amazon effect” because you can order almost anything online and have it arrive by nightfall. However, Real Estate does not move quite so fast.
The market now is being compared to 2014 when we last had true “balance”. There were negotiations from both sides and it took time to sell a home. It’s the shift happening so fast that can be hard to swallow.
Sellers… here is my advice:
- Remain Patient… showings are not coming in flurries like before and you may only get one per week (or less at times).
- Listen to the feedback. Assuming the buyer/their agent will provide it, gain whatever insight you can from that.
- Adjust as needed, but don’t overreact and appear desperate.
- Look at price reductions… mixing up the listing verbiage… offering concessions to help with a buyer’s interest rate buy down… changing the primary photo, etc.
- If you can wait until January, that may be a good play right now… but speak with your trusted Realtor/Broker first.
There are many external factors that none of us can control, but ultimately they impact our market (inflation, interest rates, consumer confidence, fear mongering headlines). Two things you can control are time and price. A seller can choose to hold out and wait longer or drop the price/terms far enough to entice a buyer sooner. Although, reducing price will NOT guarantee new showings or a buyer in waiting; remember that.
Real Estate is a market, which means it will ebb and flow; ride the wave and take the emotions out of this business transaction as much as possible.
