For months I have been faithfully posting blogs. There has been much to comment on, I post on inspiration. I did lose my mojo this last month I became busy and all was well. It was not well, I did not see the Tsunami that had hit real estate here in Santa Cruz county and the whole nation. The pull back of a pandemic did not prepare, buyers, sellers, real estate professionals and all the supporting players for the wave that was going to overwhelm us.
I thought I understood what was happening the market was picking up as it does in January. It starts very fast and then February gently moves along and another surge comes in March. The market did follow that pattern. What was different was the buyers were not playing around. The buyers that have come to our area for peace, natural beauty, serenity find the real estate landscape very aggressive and some buyers are battle tested. Each offer is a hope and a dream that is shot down and sometimes set fire to. And other offers are triumphantly accepted while eschewing, inspections, appraisals and time to digest the process of buying.
Some buyers have come to understand that their bid has to be very high to win and the offer has to only appeal to the sellers bottom line and sense of security the transaction will close successfully. Gone are the days that flowery letters and candid admissions would win a sellers heart. Also gone are the days of bringing a professional, the buyer chooses to access future issues with the home. If you want a home you have to jump. There are markets where the prices spike but in a "normal" market it is often easier to see where the prices are going and it is easier to guess what the seller will take and actually get the home in contract. At this time, offering on a house at $849,000 in a very marginal part of town it would be hard to guess the price would go as high as $1,025,000. With this knowledge now it maybe easier and the coming months with more inventory there will be a past database to lean back on to land a home. Yet these types of scenarios continue to play out, trying to guess where a home prices is going to land is extra tricky here, because of all the different areas and terrains we inhabit.
There are some very skilled agents that have learned how to encourage their buyers to dramatically overbid to get a home and risk losing their good faith deposit. They are helping their buyers get the home, but at what price. No second guessing of paying too much. The buyer has to settle with the comfort of actually winning the home and their battle is won. This does have repercussions, first these bench marks for prices are not going to go away as the market sees new inventory. Second this may open sellers up to lawsuits for demanding the buyer remove any physical inspection on their own to verify condition. Lastly this changes the landscape of a community in terms of affordability.
A colleague explained the current market is much like a Tsunami it is really a disaster you cannot see, but it gets you and you live with the fallout. He said he and other realtors are just watching to see what will happen. He believes we need to understand this is a wave and to ride out, he did caution that prices will most likely not ease with more inventory. But he believes in the coming months as we pick ourselves up and recover from this wave we will understand how to navigate the smaller hopefully more rideable tides.Posted by Michele Replogle on