What a difference four months can make in the property world! My goodness me. When I look back to the summer, it is ridiculous to think of where we were then to where we are now! In the summertime, it was a strong seller’s market, the homes were flying off the shelves with multiple offers over list price. There was a horrible lack of inventory that made most of us crazy. We knew it couldn’t last, especially with the kick up in interest rates, but by late June things were swiftly changing.
Folks, who had been on the fence about selling, suddenly realized the time was now if they wanted to capture any “top of the market” action, so lots of homes went on the active market in a kind of fire sale reaction. I recall a convo with a potential seller that went something like this.
“So, if I don’t list in the next month or so, when will the next peak of market be?” Of course, I’m no economic genius or crystal ball reader, but these markets do come in cycles and, as an old dog of real estate, I would say you are likely looking at 10 to 12 years for another boom town to come around, is what I told him. He looked at me incredulously. “That long?” I quickly diverted him to another “expert” in the field, because no one really knows about these things, do we; even when we kinda do.
I was shocked to see a foreclosure home coming up on the active market. My buyers wanted to go and see it. Oh no! We didn’t even cross the threshold of this funky teardown and the old memories came rushing back — and not in a good way. Treading through disgusting carpet and cockroach-ridden doors in the old days of REO, never knowing what you might find and hoping that it wasn’t going to be something dead.
A few of us old dogs have agreed that we will struggle to do that work again, but here we are — they are starting to pop up again and the buying public sometimes imagine that a foreclosure means a deal! Oh, there are deals to be had out there, but you don’t need to visit a fixer-upper to find them.
I recently showed seven houses in Greenfield — they were all on the active market with no current offers on them. That stopped me in my tracks — such unfamiliar territory! Not only that, but the listing agents contacted me after my showings for feedback. That hadn’t happened in a while either. The buyers were certainly now moving into the driver’s seat, except that the seat wasn’t super occupied.
Buyers, where are you? With higher interest rates and negative press comes reluctance to seize the day and jump into the melee. It’s amazing what buying down some points can do or asking for seller credit for closing costs! We hadn’t seen that in a while either. Some first-time buyers of ours took the leap of faith and wrote an offer on a property that they would have been priced out on a few summer months back and most certainly secured at about $50K higher than they are currently paying, if they could have secured it at all. They are now in contract on this home. This is our market now.
A lender I work with noted that there are some nice loan programs coming out to assist the buyers and the rest of us in this crazy business. And that does always seem to be the way. As we step inside difficult markets, the wheels of the economy still need to keep turning, so that is where creativity comes to the forefront, and we are presented with other ways to make the home purchase happen for people.
“Oh but the rates, the rates!” some say. And we say, “Don’t worry about the rates. Some people bought at 18% interest way back when and they didn’t lose their shorts over it. No, what they did was they got themselves on the homebuying ladder, a good place to be in a home environment where rents continue to climb and there is a scarcity of housing!” There will always be ways to maneuver through a rate uptick and a difficult market environment; you just have to align yourself with professionals that are not scared by any market.
A colleague of mine noted how exhausted she was trying to be productive in this transitioning market, and I think it can be a trying time for all of us. We must sharpen our tools, think creatively, get our rest and exercise and fresh air, and do the very best we can do for our clients.
We are all in the same boat — sellers, buyers, lenders, clients, agents. If you pay attention to the economic news, none of this should be any surprise. What goes up must come down and all that. It is currently an opportunity for buyers who were previously priced out or on the fence about stepping into the market to get their loan approvals freshened up and take a look at all the home choice on the active markets.
No soon as the seller opportunities dip, the buyer possibilities develop and unfold into a much better scenario than they have had the last few years. If you are still in doubt, examine the price increase in the current rental market! They have not gone down, nor will they until, or if, we have a housing glut in California.
Examine the tax benefits of being a homeowner and, even better, the security you are giving your family that their house is not going to get sold out from beneath them or their rent is going to escalate to unreachable heights. Home ownership is life security and most of us will agree on that.
Gosh I’m tired — all of us in this industry are tired. Is it time for the holidays yet and a little bit of well-earned peace?