Things are happening out in the world, and there is a lot of general reporting on the real estate market, but here I will talk about what I know which is the Santa Cruz County market. Currently, we are seeing very low inventory levels. Only 170 listings county wide and prices range from $10,000 million to $399,000 as you can imagine that equates to very few listings that fit the location and budget of the average buyer.
I had a conversation with a seller recently and I said, “you know what? We talked about your home going on in May, and I still stand by that right now.” It is still pouring rain. It's still snowing in some parts of our county, and it is slowing the market down or basically stopping it even more than Covid did. Sellers are holding back they do not want people tromping through their house, with wet footsteps and wet jackets. They have got their house ready to sell and freshened up and want it to stay that way. Or they want to get it painted outside and they can't because it's raining. Getting a home ready in the rainy season is tough.
And buyers are stalling too. The new buyers that come in in the spring, the buyers that decide for better or worse they are buying a house and getting ready for the new year, they're going to wait. They're going to wait for the weather to be better. They don't want to go out on the roads. If they're coming from other areas, they don't want to travel in poor weather. Those new buyers that come into the market, they're going to wait. The line I repeat often in my videos is “it is time or money.” If you want to sell now, and you need to go on the market right now, you may not make as much money as you would later in the spring, early summer. If you are worried about top dollar, and that is your goal, then I recommend waiting. But if you can wait out the rain you will fare better.
I know that when you are going to sell a property as a seller, you have goals and you have things that you think about, and this does not always match what's going on in the market. You have to do what is best, but I would say to get top dollar at this point, despite the low inventory, I would wait for the sun to come out.
Our in-house mortgage lender “Guaranteed rate” has said that experts expect lower inflation, a recession like slowdown, but that doesn't hurt the real estate market. Typically, in recessions, real estate does very well because it is a known security, incomes are increasing, and that also will help affordability on housing. We might see that the prices go down a little bit. Yet due to so little inventory I don't think so. And we do not see inventory rising because some sellers are locked into low interest rates that they lose if they sell, or where they want to go has gone up in pricing or with Covid done they are rethinking moving. Also, rents are high and rising, and I have noticed people believe buyers will not buy because of interest rates going up yet I think have you seen rents lately? Those rental prices are starting to match mortgage payments, which we've haven't seen before in this area rents matching monthly mortgage payments. This will drive some of the renters into the housing market because they're going to get, a tax incentive, and make equity.,
STORY TIME: I wrote some offers for some buyers lately, and it is a difficult environment. And I wasn't prepared for how I got blindsided by a few situations and where my buyers were writing offers and being encouraged to write offers, meanwhile the agents were courting other offers and not letting us know, never mentioned it. They were encouraging offers yet not being very transparent. “Can't wait to see it” An offer is written up the offer, with all the attachments of proof of funds, lender letters, introduction letters and the listing agents say casually “oh, we took another one.” The moral of this story is in tight inventory expect that some common courtesies may not be honored.
The lesson is, especially if you are a buyer, or a seller, great communication is important. It makes things so much easier. And buyers know when you are going to look at properties, understand that you are not alone. You may be in the house alone with your agent, but, or you might even be at a quiet, open house due to the weather. But that doesn't mean that there isn't someone else circling and writing offers on the same home. You are not alone in real estate anymore. There are people out there and you may not see them, but they are probably looking at the house that you are looking at and may get that offer right underneath yours or after yours. And it might go a little sideways.
Posted by Michele Replogle on
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