Andrew Wetzel's Musings

August 22, 2022

The Real Estate Market is Changing (Again!)

After many months of a buying frenzy that seemed more like an auction, the Real Estate market is changing. Inventory levels have increased with the market adding more listings each month than there are properties going “under contract. Some of these are houses that came back on the market that did not sell before and needed less competition and/ or lower prices to sell.

The number of multiple offers has generally decreased and, whether it is the market or buyers taking a stand, the number of purchase offers made “sight unseen” or without inspections seems to have been greatly reduced. Many agents and consumers, both buyers and sellers, are happy about all of this. However, when markets like we have seen change, often with little warning, one question always comes to mind:

What about the properties that did not sell?

Many properties came off the market and still remain off the market. I work with many sellers whose listing contracts expired without selling or who canceled their contracts. There are a variety of reasons for both expired and canceled listing contracts. Pricing and marketing are the primary reasons why houses do not sell but there are times when owners change, delay or cancel their plans.

Due to the pandemic, some sellers are still reluctant to let people they do not know and who may not be financially “qualified” to buy into their homes. Others may have issues they are dealing with, especially if they need to buy their own “next home”. While selling their home may produce a “windfall” if they have a lot of equity, what will buying cost?

My primary concern is always whether people are making an informed decision or reacting to what they “think” is happening in the market. Selling and buying Real Estate are personal decisions involving what is typically our biggest asset and our largest investment. As with the market 15 years ago, the sellers who jumped in early may have had the best success if they needed to buy another home. If that was not a concern, they could wait for prices to get to the point where they were compelled to sell. On the other hand, some sellers waited too long and missed an opportunity to maximize their proceeds. When will the next really hot market arrive? It could be years. Maybe not.

Buyers and sellers need to do the same planning and preparation that those tasks typically require, regardless of the market. Easier said than done! Anyone looking to sell or buy needs to understand their local market and decide how to react to the “variables” that exist. Hopefully, they know what they need and want from the process and understand that they cannot control interest rates, the economy, inflation and other things. The effects of buying and selling remain for years. They are important decisions and likely require the knowledge and insight that a Real Estate professional can provide.

I tell my clients that I cannot guarantee that their house will sell if it is on the market but am fairly certain that it will not if they take it off the market. Anyone trying to sell now may have less competition even if it may take weeks or months instead of days to sell and they may not see multiple offers. Hiring an experienced, trained and educated professional is more important than ever.

Regardless of “supply and demand” factors, every house will not sell. Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”, whatever that means today. Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their market and/ or they were poorly marketed, meaning that some buyers and agents may not have even known that a house was available to look at or purchase. Some buyers may even make “full price” or higher offers just to control the process only to have remorse later as inspection results are revealed. Of course, this may well depend on the ratio of buyers and sellers so there is more to this than raw statistics.

If a market has a lot of inventory, some buyers may not be willing to look at houses priced high compared to the rest of the market:  why try to negotiate a price down when other similar properties are available at more competitive prices or similarly priced houses offer more? Many sellers open to negotiating their price will never get the chance. I will be happy to discuss specifics with you.

The “bottom line” is always that you should do what is in your “best interests” and plan accordingly. There may be no “perfect time” to sell or buy. Buyers waiting for the “best” house to come on the market may miss the one that really met their needs and wants. Sellers waiting for a better offer may see their activity level drop off or see offers lower than what they have already declined.

If you want to sell or buy, let’s talk. There is no obligation but you may get the information you need to decide what to do next. It is better to know than to wonder what might have been.

Remember,

There is no time for inexperience, empty promises or false expectations.

HIRE WISELY:  We are notall the same”!

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