This is the first time that social media has had the chance to influence the real estate market, and as you can guess, it ain’t pretty. There are no guardrails or qualifying of the author’s opinion, and as a result, people get away with saying whatever they want.
Logically, the conscious mind will remember that real estate is local, and that you can’t believe what you read from strangers on the internet. However, if you listen to friends and family, and they have been influenced by social media, it can still play a role in your decision-making process.
It’s why we will likely get off to a slow start in 2023 – people won’t believe it, until they see it. Plus, if they don’t see it by the end of March or April, then they might even give up prematurely (buyers and sellers).
But we need to adjust our expectations of the inventory – it’s going to be lower than ever.
Two likely scenarios:
- The inventory of superior homes will be extremely tight. Homeowners are very reluctant to give up a trophy property, and if they do, they sure want top dollar. There weren’t that many sold during the frenzy, and now that they’ve ‘heard’ that the market is bad, there could be even fewer quality choices for buyers.
- The inventory of inferior homes will get picked over, with most buyers in shock over how little the pricing has adjusted for the scratch-and-dent homes. Those listings will languish on the market as the sellers patiently hope that the ‘right’ buyer is coming tomorrow, or some day soon. But once a listing has gone unsold for more than a month, we know what happens – it triggers the lowball offers.
The last two Januarys we have had contests on how many houses between La Jolla and Carlsbad will be listed for sale. In both cases, the actual counts were much lower than most of the guesses. We will do another contest next month, and it should give us a clue on what to expect for the selling season!
But we haven’t had the definitive dump on pricing that would have made it easier on the buyers, so the interpretations of the market’s direction next year will be scattered. Many will think there is more downdraft to go, and wait it out. Some buyers will think prices got more attractive, and if they can just lowball a seller out of another 10% it would be about right. Some will be able to land a top-quality home for a price they can live with – and together, these three groups will make the market in 2023.