Real estate memes are everywhere drumming up engagement for the nation’s fastest growing indoor sport: Armchair Real Estate. Part fantasy football/part tv game show competition, there’s a huge home audience playing along with the market right now, testing its skill by guessing what homes have sold for.
It’s great fun to watch from the sidelines and keep stats on the market’s crazy trajectory. Unless of course, you’re one of those poor souls trying to buy in the midst of the hardest real estate market ever. In sympathy let’s launch the Double Jeopardy round of our game and ratchet-up the degree of difficulty. Instead of guessing what homes DID sell for, players now have to guess what the latest listings WILL sell for after the dust settles in the multiple-offer moshpit.
Henceforth everyone is required to compete on the same level with all those real Buyers and Agents struggling to guess how much/how little they can/should offer just to have a shot at a modest little 3br, 2ba, 1500 sq ft home in Live Oak. Anyone in the studio audience who wins in Double Jeopardy is ready for a call-up to the big leagues.
Back in the good old days of pre-covid, best practices always dictated that before making an offer, it was crucial to do a CMA (comparative market analysis) and take an in-depth look at all the recent sales in the neighborhood. But In a market that has appreciated so dramatically in such an incredibly short period of time, conventional wisdom doesn’t count for much anymore.
Real Buyers and their Agents are trying to wrap their heads around the fact that what a house WILL sell for these days, has almost nothing to do with what other homes in the same neighborhood previously sold for. Everyone’s guess is as good as anyone’s guess.
The top has fallen out of the market and there’s nothing but blue sky up there. The only comps that count are the imaginary ones in Sellers’ heads. And this is where we step back and remind ourselves what the definition of Fair Market Value is: The price that a willing seller of a property and willing buyer agree on. It is that simple.
But that’s not the same as what a buyer WANTS to pay. It’s what they are WILLING to pay. The entire multiple-offer process is designed to flush out the difference between the two.
NEXT WEEK: It ain’t about the comps, it’s about the competition.