Think the real estate market is getting back to ‘normal”? Whatever normal was, you can probably forget about seeing that again.
Here are a few reasons why:
1. We have a new relationship with foreclosure – it’s no longer a threat, it’s something from which the government should save us.
2. Interent tools disseminate lots of data, but their primary use is to alert buyers about new listings. This has scrunched the selling period from months to minutes – and it catches most sellers off-guard.
3. Prices have not only bounced back, in many areas they are at all-time highs. Wow, that didn’t take long.
4. Comparable sales nearby don’t seem to matter as much as winning – and buyers are regularly paying well over list price to get a house.
5. Cash buyers are everywhere, and most are owner-occupants. In North SD County’s coastal region this year, we have had 25% of the buyers pay cash for their house (579 out of 2,345) – in an area where the average sales price is $1,226,056!
6. People who were underwater have stayed put, instead of leaving.
All of the above has caused the inventory to tighten dramatically.
But we will have our cooling-off periods, like now. Summer is wrapping up, school is underway, and buyers are hoping that some of the long-time listed properties might lower their price.
We will have some ebb and flow of sales and pricing, with winners and losers. Both sides are grappling with how to handle their own decision-making given the lack of inventory – which could last for years. But all considered, the market is remarkably balanced at this time!
Today’s tip: Sell when everyone else isn’t.
Information asymmetry is no longer as large. You may not “overpay” as often but screaming bargains no longer exist at all.
Another factor is the steep education dissemination curve. Sellers are learning how to fluff and show for best price. I don’t want Contractors Warehouse rehabs. I’d rather buy raw and do my own. Unfortunately sellers have learned the art of presentation. They get a better price with moderate updates.
I think the art of staging a home will grow substantially.
Why improve anything permanently when you can use lipstick and eye candy for the temporary fluff?
The buyers who use inexperienced agents and whip through a hot new listing in three minutes won’t know the difference until after closing.
Flippers have already mastered the taking-advantage-of-the-naive.
Those who saw this but couldn’t make it work on a mobile device, please try again on a PC or a Mac:
http://bbemaildelivery.com/bbext/?p=land&id=E61ABF78137EB988E0408F0AAB977C7B&vid=80da56ba-5393-2f63-71c2-bbe256c4982f
The hitch will be corrected for the next edition!
Good analysis. The free flow of information has compressed the inefficiencies of the market; the uniformed seller (or buyer) and out of area agent that walk in without a clue is diminishing. The grand slam sale or bargain of the decade will be much harder to come by, if at all. You’ll always have the “i want it now!” buyers and the “dump the thing” sellers, but they will be further and further between. BTW, Kayla needs a catch phrase.
I agree Jim, staging is the new must have. Any Realtor that doesn’t have staging contacts that can stage for a 0.5% cut of the sale is on their way out. That’s all it literally take to stage the critical elements of the home for max impact.
Sellers are best of literally moving out, stage it from empty with all their clutter gone and paying $3000 to stage a $600K home and getting extra $30K on it than selling it with their clutter and sitting a 60-90 days and getting $580K on it.