Is the Market Hot or Not?
I’m hearing anecdotally from a lot of agents that they think the market is shifting, softening, slowing down, whatever you want to call it. This is primarily based on their listing aren’t selling in 4 days. Really, another agent just mentioned that to me. It goes hand in hand with only getting 6 offers on a listing instead of 10 or 20. If you got 20 offers, you most likely priced too low.
Here’s what I’ve seen through a few major market shifts as in the financial crisis and the rebound from the pandemic: no one rings a bell to signal we’re off to the races. Or at the top or bottom.
I would also add to that an old adage that we used to talk about in real estate office meetings (remember those). The public perception of where the market is at usually lags the data by about 6 months. So right now, sellers might be thinking we’re still in the Summer of 2020 not the Fall of 2021 while buyers sense that with more inventory and less competition they can be a little pickier or not as aggressive.
To put it another way, there are only so many people that are moving as part of the great migration or being able to work from home and let’s face it, buyer exhaustion has set in to a large extent.
In fact it has recently been noted by Redfin via Inman news that:
“As the market normalizes, so has the level of bidding wars, according to Redfin’s market report released on Tuesday. In August, 58.8 percent of the home offers written by Redfin agents faced multiple bids — the lowest level since August 2020 (59.4 percent) and 15.5 percent below the peak in July 2021 (74.3 percent).
While sellers continue to have the upper hand, buying a home has become slightly easier this summer as the country’s acute shortage of homes for sale is no longer intensifying and the market has undergone its typical seasonal slowdown,” the report read. “Home-price growth is stabilizing following months of record gains, and measures of competition aside from the bidding-war rate are also losing steam.”
“Sellers are still pricing their homes very high, but a lot of buyers have had enough and are no longer willing to pay the huge premiums they were six months ago.”
Let me add to whatever is going on currently that most loan officers I speak with expect to see rates hit the mid 3’s later this year (heaven forbid). I can tell you that the last time, pre-pandemic, that rates got into the high 3’s buyers flipped out. Currently I’m still seeing buyers get low 3’s and even high 2’s. In general, don’t expect the price appreciation to continue unabated if the rates go up. Will prices go down? Sure, on over priced properties.
Going back to the Redfin comments for a second.
By definition, I believe their pool of buyers may not be representative of the buying public in general because of their business model and the general price point they operate in, at least in the Los Angeles area. I look at their data as possibly a leading indicator of where we might be going.
SOME OF US ARE STILL REALL BUSY
I haven’t seen any fall off in my business. In fact. some weeks I’m launching 2 listings at once. That often leads to 2 photo / video shoots the same day and you get some fun footage not necessarily used in the final video as in the example below.
The properties are 634 9th St in Hermosa Beach and 1616 Granville Ave in West LA. Enjoy!