If you have been sitting on the real estate sidelines reading your online blogs or news websites, certainly you have seen stories about it. And if you have been out there trying to find a house to buy, you have experienced it first-hand.
The market has gone nuts.
Just six months ago, internet real estate company Redfin polled real estate agents and only 54% said it was a good time to sell, while fully 75% said it was a good time to buy. Just about any Realtor you asked asked would have been encouraging you to get into the market to buy: Mortgage rates are low, low, low! Prices are low, low low! No better time to buy!
Starting last year, investors did begin shopping for properties for renovation, and that boosted the market a bit. But average first time homebuyers were not looking for a property that needed a huge investment of time and money to make it ready to move in. They sat on their hands.
Finally — just in the last three months — Buyers started coming out in droves, looking for “nice” houses in good condition, in a good location. The problem is, there aren’t enough of those “nice” houses currently for sale! We have an inventory problem, which means that there are multiple buyers pursuing each “nice” house that comes to market, bringing back memories of the housing boom all over again.
In another Redfin poll taken recently, 82% of agents now say its a good time to sell, but only 57% now said it was a good time to buy.
Why aren’t Sellers stepping up to the plate and listing their homes? Well, everything that property owners have been hearing about the market for the last five years has been absolutely terrifying. Prices were dropping, dropping, dropping! Nobody is buying! The price of your house is so low you won’t even be able to pay off your mortgage with the proceeds of the sale! If you are able to sell, it’s a terribly long process and you’ll spend months on the market and have to give back thousands of dollars to cover the Buyer’s closing costs!
News like that was not going to get anyone to rush in to their local real estate office and offer their home for sale.
Two things have to happen for the market to settle back into a normal routine. First, Sellers have to get the message that if they own a well-maintained, attractive home in a decent location, and they price the property appropriately, they will be able to sell now without too many problems.
Second, Buyers have to realize this is no longer a market where the Buyer reigns supreme. The days of the rock bottom bargain may be gone. Buyers no longer have the leverage over the Sellers that they have enjoyed for the last few years. Negotiate to a reasonable price, and then say ‘yes!’