What Sellers Have to Wrap Their Heads Around
Continuing the conversation… we’re in the early innings of a market shift, one that was arguably long overdue. Since most people either can’t remember or have never experienced anything BUT a market driven by multiple-offers and a crazy-fast pace, it’s going to be a bit of a wild ride over the next few months.
Somehow the market will find a way to muddle through and homes will continue to be bought and sold, even if there are fewer overall transactions. Real estate revolves around big life transitions: marriage, children, jobs, aging, death and people don’t stop living (or dying) just because the market slows down.
Here are some things Sellers will need to wrap their heads around:
Good News: This isn’t 2008 and the market isn’t going to crash. Sellers have too much equity to start giving their homes back to the bank and a 30 year housing shortage will insure against huge price drops.
Bad News: Interest rates, inflation, recession fears and stock market volatility have all taken a toll on what was a perfect Sellers market. Real estate is becoming more human again. Those waiting for that lopsided Sellers market to return may have to wait until their next lifetime.
What to Expect: Sellers have to adjust to a new version of old norms: fewer multiple offers, longer days on market, more supply, less competition, longer timelines, tougher appraisals, lower down payments, renewed contingencies, more renegotiations and more escrows falling through.
Just a Dream: When the median price hit $1.6m in March that was an outlier! It was never close to that before and hasn’t been since. March shouldn’t be the benchmark for today’s pricing, July’s median price of $1.25m (still incredibly high) is more like it.
Overbids? Not so much…In July, the average home in Santa Cruz sold for less than it was listed for the first time in two straight years, In March, the average home sold for 10% higher than it was listed for.
Chasing the Market Down: Now that homes don’t always sell in the first week, days on market are a Seller’s worst enemy. The longer a house is on the market, the less it will sell for. Sellers should get familiar with the concept of chasing the market down – before they choose their list price.
Aspirations Earned: Newsflash! If you want to get more for your home in a shifting market – you have to work for it! You can’t just put a house on and expect it to sell for top dollar. Great preparation, presentation and staging are absolutely essential to great outcomes.
Not All Houses Sell: As incredible as that seems, it’s true and will get truer over time.