For home buyers, it’s hard to tell if you are on red alert hunting for houses, or sitting on the sidelines because it feels the same. Either way, there aren’t many homes to consider – you can go weeks without seeing anything worth a look – so it’s hard to keep your chops up.
Then add in the end-of-summer malaise as families focus on back-to-school events and we have an environment that you would think was flat. But the first ten days of August are off to a better start than July, and about the same as June.
What is different this summer:
- Higher mortgage rates.
- No urgency due to stalled pricing.
- Having to wait now extends to sellers too.
What is the same:
- Ultra-low inventory of quality homes at decent prices.
- Sellers have lots of reasons not to sell or lower their price.
- Buyers who really want to buy have to cope with the desperation.
The biggest problem is that price reductions don’t change any of the above – unless you really dump. The two listings we’ve seen that chopped $500k have found their way into escrow, so we can say that the half-million reductions work.
But the usual 2% to 5% reductions aren’t going to impress buyers, especially after 30+ days on the market. By the time any of today’s active sellers lower their price enough (at least 2x), it’s going to be October and a little too close to the 2023 selling season. They will wait until then instead.
What’s the Best Thing Buyers Can Do? Expand the zone – look farther out and/or consider the fixers.
What’s the Best Thing Sellers Can Do? Complete more improvements – make it look like a model.
September should be more productive than we expect – we’re overdue for some real action, and buyers who have been patient might throw some offers around. Hang in there – Halloween is 80 days away!