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We’re being inundated with conflicting information, positive and negative; the question is how do we decipher what’s real, what’s spin and what to actually focus on?
We were experiencing a natural decline in mortgage rates until the war in Iran derailed that. They jumped from 6 to 6.5 in a matter of a week or so. This would typically have a profound effect on deal activity for those needing financing; however, sentiment towards this has been milder than before, as it’s been relative to the far more severe doubling of interest rates, which is still fresh in our memories. So that recent bump, to my surprise, has been taken a bit more in stride, as demand has remained solid. Note: this is partially a seasonal dynamic, as we are in the busiest time of the year, post-bonus season, and approaching a period when so many are still linked to the cycle defined by the school calendar. So the need for movement (a bigger place, a different neighborhood, etc.) increases both supply and demand, but the question is always, which force will prevail? At the moment, the equilibrium we’ve seen has been pleasing, as the market feels fair. That said, it feels like it’s beginning to lean in the seller’s favor once again.
For Sellers, there’s enough demand out there to sell your properties with multiple interests; however, pricing and presentation are the name of the game. Although overall inventory is constrained and favors you (6.7% lower than last year), that’s changing. In the last two weeks, we’ve seen the pace of new listings outperform that of last year at this time. So that particular advantageous metric could be evaporating. Buyers are highly selective right now, seeking quality and fair pricing. If you overprice, you might as well not be on the market, as all you are doing is clocking that corrosive “days on the market” metric. If you insist on pricing high, you should pay very close attention to your traffic and adjust promptly with intention. You must also present your property impeccably; if you need to stage, do it. Look up your competition, look at the photos, and go actually see those properties. There might only be one buyer out there in your subsector of the marketplace. If so, are they going to buy yours or the other person’s property? You have to beat them, meaning you have to present a better deal.
For Buyers, get up and dance. If you’re serious about buying, the earlier you get in, the better. This is a marketplace that’s expensive…yes, but so is renting…perhaps worse, and it’s not getting cheaper. There are trillions of dollars (with a “T”) of generational wealth that are going to be passed down, and those funds are going to be used for purchasing property. That means the tide is going to raise all boats. And that demand will put gradual upward pressure on prices in the years to come. It’s like filling a pool with a garden hose; you can’t really see it move. But with time, when you’re not looking, it makes substantial progress. And to get in, you have to be ultimately prepared. DO you know your budget? Are you pre-approved?… Do you have that in writing? Have you prepared your asset and liability statement? Have you budgeted for a mansion tax or potential flip tax? Do you have an attorney? Do you know how to make an offer? We see some offers that are so poorly put together that they’re virtually disqualifying. Your offer is a direct representation of how you’ll conduct yourself during the deal, how you might prepare your application for board approval. That’s fundamental for a seller when considering your offer. And what if there’s another offer?… Do you have a strategy? Because you know, once there’s a second offer, you’re no longer negotiating…you’re competing.
It can be complicated, on both sides, but it doesn’t have to be. Find someone you trust, with experience, to help you.
Let’s Go Shopping! ®
Anyone interested in buying or selling should be rolling up their sleeves to determine whether the time is right to sell or if there’s a home/investment property out there for them. Who represents you matters… your best investment is often in the broker you choose; find someone with experience and whom you feel you can trust.
