I mentioned that we could be seeing a pause in the market, and for prospective home buyers, there are plenty of reasons to take a rest:
- Mortgage rates starting with a 5, not a three.
- The S&P 500 and Dow are down 15.9% and 11.3%, year-to-date.
- The list prices of homes for sale are higher than comps.
- There are very few superior homes coming to market.
- It’s a good time for graduation/vacation season!
When I look at the current batch of unsold homes, I don’t see any surprises. Either they are inferior homes/locations, or the list price is too optimistic (or both). It’s natural to add a little extra mustard to a list price so the optimism isn’t a complete turnoff if the home has been upgraded nicely and is well presented.
Buyers taking their time and being more picky about what they will tolerate is a good thing for everyone. The sellers who do everything right (spruce-up, price attractively, and are easy to show and sell) will be rewarded, and those who don’t will languish.
It is a big change from the last two years when the frenzy caused buyers to jump for the inferior or overpriced homes AND pay over list for them too. Those days are gone.
If you see more than an occasional quality home not selling, then we have bigger problems. But for now, buyers could just be waiting for some quality inventory at a decent price!
Of the 109 houses that have closed escrow this month, only 22 of them sold for less than the list price. Eight percent sold have for list price or higher!
Happy to report that the new custom contemporary in Cardiff whose proceeds were going directly to the Rancho Coastal Humane Society did sell for $6,750,000 cash or $1,650,000 over it’s list price: