Just when you don’t think it could get any more competitive, it does yet again!
A quick survey of title company reps, loan officers, and other agents reveals a little bit slower start to the selling season. In March, the difference between pendings and for sale houses was less than 200 homes (183 to be exact). That just shows you how hot the market is. Buyers found slim pickings’ to get into contract at the start of the Spring Selling Season this year.
What that means is that it’s SUPER competitive and that’s driving up prices. Buyers from the Bay Area are still buying and pushing prices higher by trumping a bidding war with cash. Recently, a client that is selling in San Jose lost out in a bidding war to purchase here and was determined not to lose out again. She scored a great home, but in order to secure the deal in a multi-offer situation she had to commit $35k over the appraised value to get the home. The average sold prices have gone up 11.2% over last year at this time.
Last Friday, I put my mom’s condo on the market and got 8 offers all over asking within 5 days. We selected a cash buyer where there would be no appraisal contingency. Representing buyers has been a tougher road this year because there isn’t as big of a selection…yet. Everyone is hoping for more inventory soon. We’re at 1.3 months of inventory which is marginally better than last year at this time (1 month of inventory in March through May of 2017).
When I talk to folks who previously thought about selling in the spring and summer this year, more than half are saying they are delaying a sale until some future date. Reasons vary: delaying retirement, deciding to stay put, remodeling where they’re at. Some think that it’s too hard to find a replacement property. They know they can sell for a great price. It’s just that the buying side of the equation has proven a little bit of a challenge.
Buying can be competitive, but there are strategies to finding a property that meets the budget and the wish list and it takes a good agent to help you locate exactly what you want so when you find it, you can jump on it. Having a full time, professional agent that sells enough volume to know the market is important. The agent network is the de facto “source system” for new listings. Agents share information about new listings that they know are coming on the market and guess what? Sometimes these homes get sold before they even hit the real source system which is the Multiple Listing Service (aka MLS). In this competitive market, you want to be plugged in to MLS so you see new listings as soon as they are Active because it can take hours to days to proliferate out to other commercial listing portals such as Zillow or Realtor.com.
You’ll also want to be aware that there are ways to list and negotiate the sale of your property that can give you more time as well. Here’s how it can work. You can put a contingency in that allows you to find a replacement property before you close or you can rent back for up to 2 months in some cases. The contingency to find a replacement property can put you at a disadvantage with buyers because they may pass up even looking at it because of the stated barrier to closing. Renting back is certainly an easier option, but may not work for buyers who have to give notice on rentals or who are closing on their homes. Some Sellers may end up moving to temporary, short-term housing and putting household items in storage as a way to secure the highest offers because if you are relying on finding a buyer who can wait, there are less of those!
Thinking of buying or selling in the next few months? I’d be delighted to help you make that happen. Utilize my expertise to help you reach your real estate goals!
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