Experience & Knowledge is Key in a Shifting Market
It has only taken about 90 days and now suddenly, the real estate market is entirely different. In March, we listed a property, reviewed and consulted on a dozen offers, and then tied up the most rigid contract of all time for our sellers, at an offer price 10% over the list price.
90 days ago, interest rates were at 3.25% and today, they are double that at 6.5%. The good news is that inventory is still low, and homes are still selling in record fast time. However, we are now seeing on average one offer for each new listing and the homes are selling for list price.
As we watch this transformation, one thing is clear, a market shift is in full motion. How we counsel you today is likely to change week by week as we follow all the macro market indicators such as interest rates, city-wide showing counts, market time, list to sale price ratio, and even the stock market. Then there is the micro market of your home and your community to consider. Is inventory growing? How many showings are you receiving? In March, you would have had 15-30 showings over the weekend. Today, it would not be uncommon for it to be 4 to 8.
In this shifting market, as advisors, we look to provide you with the information needed to interpret market data and make confident business decisions. At ELEETE, we collaborate weekly to discuss what we see in the marketplace collectively. Our agents have the benefit of listening to the insights of all 60 of our agents, and we brainstorm best practices to ensure our buyers and sellers “KNOW” everything we discuss in our meetings.
For example, if your home does not sell in the first weekend after 12 showings, do you drop the price immediately or wait? As a buyer, if a home does not sell after a week, should you make an offer 5% below list price, or will you still need to pay list price? If we look historically, in 2012 the average home on the market was listed for 60 days, and would sell for a mere 1-2% off the list price. Is this the answer? Is it relevant today?
What we do know is this, a “normal” market is one where homes do sit on the market for 45 to 60 days, and even after that period, they still sell close to the asking price. So, a seller should not react too quickly due to not getting a property sold in the first week. On the other hand, we have many data points to consider for any individual property, and those are the items that an experienced agent will review with you to determine the best strategy, in the moment, for your home, based on showings, feedback, second showings, in your neighborhood, at this specific time, and looking at your competition.
During the past few years, the robust real estate market made Realtors look like heroes. In a shifting market, the burden to be your hero is now clearly back on the shoulders of your Realtor team. Here at ELEETE, we are ready and welcome the challenge to serve you.