Here’s the next realtor.com TV ad, which is supposed to be funny. But it’s a serious topic – could some folks be offended?
At the end when you click through using the Find A Realtor button, they just take you to an alphabetical list of agents in your area of interest. I need to change my name to Aaron!
These guys are making the pitch for why potential sellers should list their home (with Jim) and sell now, using NAR stats that show foot traffic is up, and inventory is down:
http://www.keepingcurrentmatters.com/2015/06/29/two-graphs-that-scream-list-your-house-today/
Historically its been said that six months’ worth of inventory is ‘normal’ and demonstrates a healthy market. But it doesn’t take into consideration the buyers’ behavior in a tight-inventory environment, and how the internet has supercharged the dissemination of new listings.
I’d say about 3 months of inventory would indicate a healthy market today.
Let’s break it down by price range too, because different segments are hotter.
NSDCC Detached-Home Inventory:
| Price Range | |||
| 0-$800,000 | |||
| $800-$1.4M | |||
| $1.4M-$2.4M | |||
| $2.4M and up |
Sellers can adjust accordingly – the lower your price point, the more likely you will be able to sell for retail, or retail-plus. If you are in the upper region, you should undercut the competing listings nearby because, well, how should we say it, your market is bloated-plus.
Get Good Help!
For those who have a big family and prefer a secluded Old California Ranch:
Nice buy – priced $393,000 under zestimate!
http://www.zillow.com/homedetails/7060-Via-Del-Charro-Rancho-Santa-Fe-CA-92067/16730852_zpid/
Here’s a comparison of the last four Junes to those at the previous peak. Last time, the number of sales started declining, indicating trouble ahead.
In 2015 it appears that pricing has tapered, but sales are still looking strong – late reporters could make last month’s sales total the best of the foursome:
| Year | |||||
| 2004 | |||||
| 2005 | |||||
| 2006 | |||||
| 2007 |
| Year | |||||
| 2012 | |||||
| 2013 | |||||
| 2014 | |||||
| 2015 |
Sales are just the indicator – higher mortgage rates will be one of the main causes of market slowing when it happens. You hear it on the street already – buyers are preparing for a slower market, and they want to price it in now.
Some buyers get moving too fast and blow out, and others make offers willy-nilly and cancel for little or no reason. Those happen – but the deals that cancel because of repairs can almost always be saved in the moment if the buyer’s agent says the right things, the right way, at the right time:
Besides, we live in a desert!
Fannie Mae announced that they have eliminated the Anti-Buy-and-Bail rule, the underwriting guideline that has held back so many move-up buyers.
The previous rule meant that buyers who already owned a property had to have at least 30% equity in it; other wise they would have to qualify using both their existing payment and new proposed payment in the equation.
MND details the change here, along with a few others:
http://www.mortgagenewsdaily.com/07012015_fannie_mae_selling_guide.asp
Now a buyer can produce a rental agreement for their existing house, and not have that mortgage payment count in their qualifying equation!
This is the key element that spurred the last few years of the previous boom, as buyers would finance most (if not all) of their non-contingent purchase, and then go back and sell their old house later.
Now they might keep it as a rental, or sell it at some point after they move.
The Anti-Buy-and-Bail rule forced them to sell first, and was probably one of the main reasons we’ve had so many potential sellers be reluctant lately – they couldn’t qualify for both, which forces them to consider selling first and risk the double move!
In an unrelated event, I just re-upped my domain, www.doublebubbleinfo.com!
The number of houses for sale listed under $800,000 popped over 100 for the first time this year, and their average list price is a whopping $404/sf – which is back over $400/sf for the first time since February.
In other words, the sludgepit of over-priced goo is nearing its peak of the year. The mildly-interested sellers will start cancelling their listings in August.
Click on the link below for the complete NSDCC active-inventory data:
Here’s Kayla discussing her observations from the open house today:
The quick sale at Via Mariposa fell out.
The emotional swings of falling in love with a staged home and winning a bidding war were quickly brought back to earth by the home inspector.
I don’t have a problem with the defects found by any home inspector – that is their job. My beef is with their bedside manner – it’s how they explain the issues that cause problems. The over-zealous inspectors who are only concerned with CYA will lay out every problem as if the house is falling down.
The only hope is that the buyer’s agent can offset the concerns with sound advice about how to solve them. Because if the buyers are going to keep looking until they find a perfect house, they are going to be in for a long wait.
The industry has had this topic backwards since the beginning of time, and it’s not going to change. We’re going to negotiate the sales contract first, and then worry about the repairs later. When defects are found in a house during a seller’s market, most listing agents are going to expect the buyer to eat it and in many cases they do.
But we’re in a maturing market now, and buyers are less willing to pay top dollar AND incur a repair bill too.
In this case, the buyer’s agent was a recent licensee working for a big team, which happens a lot. Because they don’t have the experience of knowing what to say in the moment of impact, they push the panic button and join the cancellation parade. If these issues aren’t addressed in the moment, it takes a miracle to resuscitate it later.
What can be done? Provide a written home inspection prior to the property hitting the open market.
The buyers are welcome to hire their own home inspector, but there are immediate benefits to all:
Providing an inspection report upfront will help to smooth out the highs and lows of the homebuying experience. While I’m all for the enhanced first impression created by staging, it’s not enough to get buyers to the finish line.
Meanwhile, back on the case!
Hat tip to daytrip for sending in these visitors to San Diego responding to 4th of July questions (they have to be from out of town, right?):
