By Lily Ray Wyss, May 25, 2022
By Lily Ray Wyss, May 25, 2022
It’s here…. the real estate market has shifted… slightly!
It hasn’t shown up just yet in the numbers, since we are reviewing recorded numbers from April and the shift has only come about in the last few weeks, but anecdotally we are seeing a shift.
It’s happening here in the Portland area and from my talks with realtor colleagues across the US and in some parts of Canada it’s widespread.
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What we are seeing:
The hottest homes are still getting multiple offers, but more like 3-4 offers versus 7-10.
For your typical home, we are still seeing a decent amount of showings and maybe 2-3 offers.
And we are noticing fewer people through open houses overall.
This also means offer prices are not jumping quite as dramatically as they were say in 2021 or just a few weeks ago frankly.
What’s most notable though is we are starting to see homes sit on the market and not just automatically go pending no matter the list price, amount of prep & marketing, or condition of the property.
Even perfectly nice homes are noticeably NOT gone by the end of the weekend.
So why the shift?
As discussed last month, rising interest rates were and are going to have an effect on the market.
Sadly it is pricing some people out of purchasing a home, for the time being, and it’s also making it less advantageous for less serious buyers to buy, say some investors or those who aren’t needing to buy asap since money isn’t as cheap as it was just a few months ago.
This makes the buyer pool smaller and lessens the extreme demand we have been seeing by buyers.
And with higher rates, those who are out there actively buying, for the most part, are not going to be able or desire to offer up on a home as much as they would have in the past. Creating some greater stability around price.
What does this mean for homebuyers?
While you will still want to be strategic with terms and want to be ready to offer higher than the list price (we are still nowhere near a balanced market, a balanced market is 6 months of inventory and we are still struggling to get a month’s worth), you shouldn’t expect just as much competition and therefore won’t need to relinquish all of your contingencies and protections (something I believe no home is worth anyways), and you won’t have to jump up in price just as much.
What does this mean for home sellers?
Prepping your home is key. Where we might have told you to not bother with every single project around the home before, now we are saying it’s a must (especially since homes are falling out of contract more easily now, another topic we could go into at a different time).
Pricing your home properly is going to be ever important. Firstly we need to have a frank and transparent conversation around expectations. While in the past I could show you comparable properties that recently sold in your area and tell you you could get this price or most likely 100k more! That’s just not happening as much.
So we need to come up with a price together that is strategic, attractive to buyers, and also is a price you are willing to accept an offer at if that’s the price you end up getting.
Whether you are a home buyer or a home seller (or both!) what’s going to be most important to your success is understanding this market and having clear expectations. That is what we realtors are here to help with!
If you have any questions and or if this inspires you to make a move I would love to help.