I admit it. I don't always see trends until they are obvious. Dottie, on the other hand, almost has real estate clairvoyance. A week of so ago, she casually mentioned to me that the market seems to be turning toward a seller's market and various sources are predicting that we're moving toward a shortage of available homes.
Since then, I've been thinking about this and realized that she's right. As usual. Very subtly, sellers are gaining more power and control in the transaction. Depending on where you are, sellers have been getting beat up pretty badly over the course of the last 6 years or so. Buyers developed a sense of control that they wielded mightily. Low offers, walking away from a counter, requesting outlandish concessions and expecting sellers to bow down and kiss their feet for the privilege of selling their house way below market or for less than they paid for it.
But...
lately, sellers are standing firm and it's the buyers who are starting to take a little whipping. Buyers who have been waiting for rates to go lower (really? is that possible?), buyers who have been offer-hopping trying to get steals, and buyers who have simply been slow to act may soon find themselves in a much different position. Why is that? Well, a few reasons.
First, in the past, a family who needed or wanted to move up quite often ended up in new construction because it's less expensive than existing homes. Existing homes appreciate over time, you see. When the recession came along, builders were going bankrupt right and left. There simply aren't as many of them out there anymore. The majority of new construction today is being built by the big companies that were able to weather the storm.And, viola, not as much new construction for existing homeowners to compete with .
Second, many people who wanted to sell their homes but couldn't for one reason or another went the route of that show, "Love it or List it." You improve your kitchen, update the baths, add a screened porch, put it new flooring and all of a sudden you realize you no longer NEED to sell your house and can stay put. This certainly takes the pressure off someone who thought they had to sell when they realize they are ok where they are. So, what this results in is less and less homes coming on the market, thus creating shortage of inventory. Of the ones who went this route and decided they still wanted to sell are now in a position to say, "No. I'm not having a fire sale on my house. Thank you for playing. Don't let the door hit you on the way out."
I actually hate to hear people in any sales profession say "Now's the time to buy. Now's the time to sell." Someone is always buying and someone is always selling. You can't have one without the other. However, buyers who have been waiting around should sit up and take notice. Keep your eye on the ball because the game is changing. Interest rates have been low to help people sell, not to help people buy. That's going to change as the shortage grows. Wait too long and you'll wake up realizing that the tables have turned and the sellers have all the power.
Since then, I've been thinking about this and realized that she's right. As usual. Very subtly, sellers are gaining more power and control in the transaction. Depending on where you are, sellers have been getting beat up pretty badly over the course of the last 6 years or so. Buyers developed a sense of control that they wielded mightily. Low offers, walking away from a counter, requesting outlandish concessions and expecting sellers to bow down and kiss their feet for the privilege of selling their house way below market or for less than they paid for it.
But...
lately, sellers are standing firm and it's the buyers who are starting to take a little whipping. Buyers who have been waiting for rates to go lower (really? is that possible?), buyers who have been offer-hopping trying to get steals, and buyers who have simply been slow to act may soon find themselves in a much different position. Why is that? Well, a few reasons.
First, in the past, a family who needed or wanted to move up quite often ended up in new construction because it's less expensive than existing homes. Existing homes appreciate over time, you see. When the recession came along, builders were going bankrupt right and left. There simply aren't as many of them out there anymore. The majority of new construction today is being built by the big companies that were able to weather the storm.And, viola, not as much new construction for existing homeowners to compete with .
Second, many people who wanted to sell their homes but couldn't for one reason or another went the route of that show, "Love it or List it." You improve your kitchen, update the baths, add a screened porch, put it new flooring and all of a sudden you realize you no longer NEED to sell your house and can stay put. This certainly takes the pressure off someone who thought they had to sell when they realize they are ok where they are. So, what this results in is less and less homes coming on the market, thus creating shortage of inventory. Of the ones who went this route and decided they still wanted to sell are now in a position to say, "No. I'm not having a fire sale on my house. Thank you for playing. Don't let the door hit you on the way out."
I actually hate to hear people in any sales profession say "Now's the time to buy. Now's the time to sell." Someone is always buying and someone is always selling. You can't have one without the other. However, buyers who have been waiting around should sit up and take notice. Keep your eye on the ball because the game is changing. Interest rates have been low to help people sell, not to help people buy. That's going to change as the shortage grows. Wait too long and you'll wake up realizing that the tables have turned and the sellers have all the power.
