Has the Real Estate market crashed?
We have experienced an incredible amount of real estate price appreciation the last few years. Since the quote unquote crash around 2007 the real estate market has been on tear! In some areas we are back to 2007 (or close to it) type pricing. This has been fueled by lower interest rates (mostly all time lows) and low inventory of homes to purchase. In areas I service that is still the case, but something interesting I noticed last week.
We still very low inventory BUT we had a little more than 10% of our inventory experience a price reduction! Why is this significant? Well it means even in the type of market with all this appreciation there are still homes that are not selling, YET I have two properties we put on the market this month that were on the market less than one week, both had multiple offers and both are in escrow well above their asking price! Why is that and how could it be?
The days of just having the owner pick a price or the agent pricing property high just get a listing under contract may be over or at least slowed down. There are PLENTY of buyers but as prices go up certain potential buyers get PRICED out of the market. Some of the properties are having difficulty with appraisals, maybe the condition is a little suspect. This makes it a tale of two markets. Buyer understand when a "good" deal or well priced property comes to market and are ready to make a move on it. The flip side is I believe some buyers are looking at some homes and understanding they are just too high at least for their budget. Since most homes are selling really quick when priced well, if a property is on the market longer than the normal days on market time for the area, buyers become cautious about the property and sellers panic too.
The morale of the story is price your home to sell not just to have it listed, have it show in its best light, and agents please do not be scared to tell the client the truth, even if it means they do not list with you. Trust me its better for business and your soul not to mention your pocket book!