Like most realtors, I’m often asked, “How’s the real estate market?” There’s never been a one-sentence answer to this question, but these days it’s harder than usual to be succinct.
I usually say something like, “Interesting,” or “A little weird right now,” before launching into a longer explanation if they seem like they want more.
But what is this “weirdness?” What’s causing it? Properties are still selling – but everything seems to be happening in dream-like slow motion. And the horizon is distinctly murky. I blame uncertainty. Buyers and sellers both are feeling uncertain about the future, and that’s not good for business.
A statistic: Beginning this January, mortgage applications have been rising month after month all year. Yet, the number of bound contracts and closings has remained static. There are lots of buyers out there, waking around with pre-approval letters in hand, who aren’t buying. It’s not an inventory problem – inventory well above last year. Apparently, people aren’t making offers.
Uncertainly breeds fear, and fear breeds paralysis.
So, really, what do we have to fear? Actually, there are a couple of things …
Overpricing
A lot of sellers and potential sellers are still enjoying mortgage interest in the 3% - 4% range, with vivid memories of the snatch and grab market of 4+ years ago. They tend to have a “make me move” mindset, and price their properties that way. That is not going to work. The properties that sell these days are … priced to sell. The ones that sit for months without an offer are not. If the idea of waiting months for an offer – an offer that’s almost always going to be well under asking price – doesn’t scare you, go ahead and price it like it’s 2021. Otherwise, run away screaming from that temptation.
Underbidding
Conversely, there are sellers who are serious about moving things along, and price their property accordingly. Buyers, if you see something you like, and you can afford it, and the comps support the price – make a strong offer and get the deal! Someone else will get it if you don’t. So, if the temptation to lowball on a reasonably priced house strikes, treat it like that intriguing door in the haunted house. Don’t open it!
Fear Itself
Channeling Franklin D. Roosevelt here … We have nothing to fear but fear itself. We are indeed living in unsettled times. Tariffs, no tariffs, some tariffs? Inflation, maybe? Fed rate cut, maybe … or not ... who knows … ? But curling into the fetal position and doing nothing is rarely the best approach. If you need or want to do a real estate deal, now is almost always the best time. Waiting and trying to game the market can blow up in your face – another thing to be scared of!