I Don’t Give 3 Shifts About It!
Updated: Apr 7
While I was having a conversation this week with a family that is considering selling their home, I shared a general market overview from the past year. They were very surprised to hear how much the market has changed, especially because it is now in their favor! They are not the only people that are learning that we are in a different market from only a few weeks ago. My how the winds have changed!
In general, the pandemic timeframe (mid-2020 to mid-2022) was an insane runup of home values due to buyer demand. Buyers wanted more space, the suburbs vs. downtown/high-rise, no yards, along with lower interest rates and of course larger yards. Being stuck at home really highlighted their new “life needs.”
Given this environment and demand, home sellers were very motivated to cash in and move on (or out of state). As with most things a shift happened quite quickly and shocked everyone. As mortgage rates began to rise and buyers were frustrated in losing out on their dream home(s) due to multiple bid situations, the market shifted. It happened about the first week of June last year. It almost felt like school was out and folks just took off for the summer (literally and physically).
Home sellers who listed their homes after this time, didn’t go pending in less than a week and, in fact, had to work harder in prepping their homes, adjusting their asking prices, and giving a bit more to buyers in order to get their home sold. In fact, the 2nd shift in the market took place around October of last year, when more housing inventory landed on the market (sellers who took more time to prep and list their home) and buyers took a step back to revisit their purchase strategy.
Fast forward over the last 90 days of 2022 – and it was nearly impossible to get a home pending or have buyers jump in the car and view properties. I began shaking my phone to see if it was still working!
Days on market (a factor we watch diligently), began to rise to levels I had not seen in over a decade: Two, three and even five months on the market with multiple price changes as sellers chased the market down. Homebuyers’ purchasing power continued to drop as mortgage rates increased. We were essentially at a standstill or standoff between buyers and sellers.
Sellers felt frustrated because they were “losing hundreds of thousands of dollars” as they watched their neighbors sell earlier in the year for so much more. Buyers were trying to time the market or just wait it out over the holidays, hoping that this year would be better for them.
Then along comes 2023 and our next major market shift!
After much education with home sellers, we began to price new listings according to the ACTUAL market value, taking into account days on market, current mortgage rates and lack of buyer demand. Well, that all changed (shifted) about the first week of February.
In speaking with homebuyers at open houses (50 to 90 groups through one open house weekend), I heard them say that they want to buy a home now, before interest rates go up even more. Interesting.
As of this writing, we are receiving multiple offers on homes that are for sale right now. Housing inventory is WAY down seasonally and buyer demand is way up! The multiple offers are not hundreds of thousands over the asking price; however, when you receive 14 to 20 offers per home, a seller has much more power to choose the best terms for their immediate needs (rent backs, no credits, as-is, waive appraisal and so on).
To summarize, that is 3 major market shifts in less than 9 months! What a wild ride! What could this mean for you?
Home sellers: If you have any thoughts of selling this year, PLEASE, PLEASE contact a Realtor and learn more about your specific situation and the opportunities that are available right now. Why? There are a total of 103 homes for sale in all of Clayton, Concord, Pleasant Hill and Walnut Creek combined. Any price, condition, or location. Are you kidding me? Mortgage rates went down this week as the Fed raised their lending rates.
Homebuyers: Get ready for a competitive market by hiring an experienced Realtor who can help you WIN by writing a strategic and competitive offer. Listen to that Realtor! This is our one job and if a Realtor is any good, he or she will TELL you exactly what you need to do.
Whew! That is a lot of information to digest, and it’s truly valuable. These are big changes in the market and I feel y’all need to better understand what’s going on right now so you are prepared in order to be successful in your home sale or purchase.
Next week, I will teach you about a phenomenal new first-time buyers program that will shake up the market even more! I’m not a big fan of most of these programs; however, this one will impact buyers and sellers!