The red hot real estate market of the past year has put many buyers on the sidelines. Driven by artificially low cost of funds, pandemic shift in how we think about living spaces and work spaces, and economic windfalls for those of us fortunate enough to keep our jobs and/or our positions in the stock market while the money we would otherwise have been spent on travel, events, and other in-person commerce, built up in our accounts—housing prices surged, in many areas at record clips. Many of my own clients tested the waters and found them too turbulent for their taste. Several times a week I get asked if the market is improving for buyers. The answer is not so simple. In the past several weeks interest rates have begun to creep back up. That doesn’t help buyers. The number of homes on the market has crept up too. That does seem to help. It’s too soon to attribute the uptick in inventory to something other than seasonal peaks—long sunny days of summer while school was out—to pandemic recovery, or to opportunistic sellers jumping in to take advantage of record high prices. Instead let’s focus on a single trend—the number of offers per listing. Over the past 12 weeks, in our sample, we’ve tracked a rough halving of the number of offers per listing. In those cases where the drop is from 50 to 25 offers, the outcome might not be all that discernable—the winning offer still stretched to best 24 others and 96% of all buyers still lost out. In cases where the drop is from 10 offers to 5, the winning offer may escalate 10% above asking price instead of 20% (a measurable if not exciting buyer advantage). But in those cases where the drop is from 2 to 1 offer (competition to no competition), buyers are realizing real advantage!
So what’s the takeaway? If you’re shopping for your dream home, in your dream neighborhood you’re not likely to find a glut of bargains any time soon, but you are not likely to have to stretch as far to get it when you make up your mind to make it yours. Housing starts are still years behind demand. If you’re shopping for non-conforming or un-financeable properties, properties with adverse conditions (deferred maintenance, poorly maintained neighbors, nuisances, busy roads, out-of-fashion floorplans and/or finishes, converted garages, functionally obsolete mechanics, environmental hazards, etc.), there are bargains to be had in just about every region in which we do business. The pandemic decoupled historic demand for condos from demand for single family homes. Condo demand has not yet rebounded to pre-pandemic normal. Condos built before 2000 are particularly value priced! One of our investor clients purchased 5 condos in the same complex and only once were bumped by another offer. In conclusion, the truism of market economics holds—there are deals to be had so long as you’re prepared to buy what others are not trying to buy. August statistical data was published this morning: https://www.nwmls.com/News--Information/page/Northwest-MLS-brokers-say-August-housing-activity-follows-patterns-of-seasonal-slowing. Have a look and let me know what you think. "What better place than here? What better time than now?" James Doerfel Designated Broker
James@PrimeRealty.io JamesDoerfel.com
Comments