Busy week … First there was a 16 offer situation on the Eastside. Then 12 offers on the Westside. Followed by 10 more in Capitola, 8 in Aptos and 6 each in Pacific Grove and North Monterey County.
When the dust finally settled, there were 6 buyers that emerged from the mosh pit victorious and another 52 (and their agents) who found themselves back at square one waiting for the next big offer scrum. That’s a lot of disappointed Buyers and Buyers’ Agents.
In some ways none of this is new. It’s all a continuation of the fast-paced, low inventory, multiple-offer binge real estate has been on since it turned the corner on the distress market in 2013. Over the last 8 years, we’ve grown accustomed to sustained levels of craziness and the record price increases that come when too many Buyers are chasing too little inventory for way too long.
But the part of this long crazy saga that’s new and that has caught everyone off guard is the blindingly quick surge in recent months that have brought unprecedented levels of market intensity and ferocity to the marketplace. Like some mysterious switch was flipped.
Right now, it’s hotter than hot. And crazier than crazy (if that possible). And a lot of us have been left speechless by the results. All on the heels of a global pandemic, a recession, continuing calls for social justice and an unprecedented series of wildfires that has destroyed homes and left the skies all over the West Coast shrouded in an eerie orange glow.
Rather than stopping or even slowing down for a breather, the market has defied logic and leapfrogged past any measure of activity we’ve had before. In July, the median price hit $1 million for the first time ever. A year earlier, in July 2019 it was at $900,000 – an even $100,000 less. Last month (August) the median price for a single family residence made another astounding jump to $1,050,000!
After 30+ years in the business I’m seeing more pre-emptive and more non-contingent offers than I’ve ever seen before. That’s: no loan, no appraisal and no inspection contingencies. And: as-is, no buyer inspections and certainly no thought of any renegotiation on price after escrow is opened. Offers 10% above list are not unusual. 20% is becoming quite common. And there have been more than a few 30% plus offers sprinkled into the mix as of late.
Where is it all going? When in doubt it’s always best to go back to the most basic part of the real estate equation – supply and demand. And that’s where we’ll pick up next week.