The Pendulum Swings

Today, we’re going to talk about the elephant in the room: the shift in our housing market.

Now, before you panic, let’s discuss how this isn’t necessarily a bad thing for either party – sellers or buyers. The heavy seller’s market we were in in 2017 and well into 2018 was simply not sustainable, folks.

Was it great to be a seller (and a listing agent) during the time? Oh yes! Was it great to be a buyer (and a bulldog…I mean buyers agent) during the heat of it? Let’s just say, thank God some of us are competitive and will fight for what we + our clients want until we’re blue in the face.

That said, I had buyers who got frustrated and decided to wait. I had buyers who let me be a bulldog for them and get them into the home of their dreams regardless of what it took. I also had clients who still lost a few of these bidding wars because someone else out there was willing to pay out of pocket and go into negative equity should the home not appraise at the value they offered to buy it for – something I simply don’t advise for my clients to do. There were many days of “the right one will be out there and it will make sense why it didn’t work out with any others” and even more “what are you willing to do to get in this home because a home is only worth what YOU VALUE IT AT”.

On the other side of things, I LOVED my listings at the time. They moved quick and, pending the price point, had multiple offers within 24 hours of listing them. Our clients loved us for it too.

Well, as the world turns, so the pendulum swings. It was like buyers got together and decided that they had enough and stopped playing the game. We’re seeing longer days on market and more price reductions on a lot of our inventory even though supply is low on resales. So…WHY is this happening?

There are obviously many variables, including what I touched on above but, one of the most basic yet primary pieces of the puzzle is that incomes weren’t increasing as quickly as the inflation of the housing market. That’s pretty self explanatory. When home prices are going up, up, up and people’s wallets and what they can get approved for can’t keep up, the market must adjust. In addition, as interest rates increase, the amount of home one can afford changes. That said, rising interest rates speak to the strong economy we’re in!

One thing I love about Keller Williams is that they study the numbers and are huge on studying the trends in the market. Naturally, we have been talking about this topic openly for the last couple of months in preparation for the shift. Here’s why you shouldn’t be “scared” regardless of what side of the fence you’re on.

If you’re a seller, expectations are the root of all heartache. Allowing your Realtor to help you price correctly in this type of market is key. We don’t want to chase a ball down a hill. We want to get out of the gate with a price that says “we’re here to sell and make moves to our next chapter”. We are no longer in the days of “well, let’s see how hard we can push the market”. If it takes three months instead of three days for your home to go under contract, don’t be surprised. Let us show you the average days on market for your area at your price point so we can set realistic expectations for what’s ahead.

That said, it’s still a GREAT time to be a seller. Atlanta is said to currently be in a bit of a bubble as well. We may be seeing price adjustments and days on market longer than 48 hours, but we’re not seeing offers $20-$30k under ask like some of our friends on the West Coast. Thinking about selling? It may be time to make a jump, unless you want to ride the wave out.

Worth noting – the HGTV blinders are on strong these days. If your house isn’t updated to the new “standard”, all a buyer sees is $15k here and $5k here AFTER paying full price for your resale. If you want to compete with new construction, price accordingly or make the upgrades to compete with new construction.

Now, buyers: before you start nodding in agreement and getting excited, let’s also talk about the “almost perfect dream home”. If the home is priced correctly and checks 90% of your wish list off except the fact that you want a new white kitchen, PLEASE don’t disregard this listing. They make renovation loans for this exact reason. Let your realtor and lender walk you through how to turn it into your perfect fit without paying out of pocket for the updates! Yes, it’s possible. Just have a knowledgeable crew on your team to guide you through it.

Ok, off of that soap box and onto…If you’re a buyer:

Yes, “interest rates are going up” but they are not anywhere close to our nation’s average in the housing market at a whopping 7%-8% – we’re still comfortably hanging out around 4.75-5.25%. I actually spoke with someone the other day who had a loan with the interest rate of 18% when they were younger. Stop overthinking the current interest rate. It’s still a GREAT time to be a buyer and, if buying is an option for you, it’s much better than paying someone else’s mortgage or throwing away money renting. Prices are also adjusting on the homes to accommodate, hence the shift. We’re just getting everyone back to an equal playing field.

Last but not least, I feel like it’s worth noting that there is also beauty in the upgrade right now. Sure, you may not have made what you would have if you sold two Summers ago, but as they say “the best time to plant a tree is 20 years ago and the next best time is today!”. Think about it this way – you may be able to get in your upgrade home for a reasonable price right now as well. Your perspective through this shift will be based on the side of the fence you’re on and I think that’s why this scenario is so great. It will give you good perspective on both if you choose to see it and take advantage of it.

The economy is strong and unemployment is at an all time low. We are not anticipating the perfect storm we experienced during the recession. No-one has a magic 8 ball and who knows what the market will do next. If it’s time to make a move to your next chapter, let us help. There is no “bad” time to make a move if it’s right for your family and your future.