Predictable Unpredictability
You know what makes this market so much fun? It’s so incredibly unpredictable and it's keeping me on my toes!
From Labor Day until just a few days ago, it felt like more buyers were finally showing up to bid on homes. In the $1.5M segment and under, a lot more buyers showed up at the bidding table and those bidders generally bid within market pricing expectations. Whereas in the $1.8M to $2.5M range, multiple sets of buyers showed up at the bidding table and put in big overbids to win mediocre property. These were signs that the market was starting to turn.
And then mortgage rates increased this week, and the palpability of the coming lull feels real yet again. The call from an agent who was expecting 6 offers on the offer date and only received one was my first tip off. The second came from clients taking notice that open houses seemed pretty quiet this past weekend. And the third has been watching sellers hold their ground on properties where buyers are submitting offers with bids under seller’s expectations.
This market can turn on a dime, and we’ve been experiencing these micro ups and downs for the last year or so. As soon as interest rates increase a smidge, buyers tend to retreat, and the ones that show up at the bidding table are winning with what they can afford, which is now much less than the day before. And they end up with a deal!
These ups and downs are so confusing for sellers because their timing is so unpredictable, and days on market matter. The longer a property is on the market, the less perceived value it holds to buyers. And perception is reality. So, those sellers who have invested in improving the value of their home before coming to market AND have reasonable price expectations almost always have an easier time selling. The rest are needing to have their pricing expectations reset for the moment.
Who knows how long this lasts. But right now, it presents opportunities for both sides of the transaction at any given time. For buyers, that means going for what you love even when rates shift up, and for sellers it means adjusting expectations for an unpredictable market.
I love this real estate stuff, so hit me up if you want more!
