Those of us in the industry felt the dramatic housing market shift in 4th quarter 2018 very immediately. I’m accustomed to shifting market conditions after 12 years as an agent and over 30 years of my family’s real estate investing but this is one of the quickest shifts I’ve experienced. After roughly 3 years of strong seller’s-market conditions resulting in constant bidding wars, rapidly escalating values, many properties selling considerably above the list price and buyers often not even getting a chance to see a home before it sold, suddenly around September-October of 2018 things cooled off. A lot.
Listings have gone from selling at or above asking price to once again seeing price reductions and negotiation before selling. By way of example my home town of Salem was selling at an average of 100% of list price in the 2nd quarter of 2017, and again 100% in the 2nd quarter of 2018, but is now selling at an average of 97% of list price over the past 90 days. Many buyers are taking their time rather than rushing to see or make offers on properties and those offers are coming with newly revitalized conditions which were all but abandoned in recent years. Home inspections are resulting in repair and credit requests again where for a couple years it was difficult to even get an offer accepted that had a home inspection contingency in it.
The shifting market conditions call for shifting strategies as both a buyer or seller. Take care not to over-compensate in your confidence as a buyer or over-price as a seller. I’ve seen numerous recent miscalculations in buyer confidence causing them to ask for too much, offer too low and push too hard in post-inspections requests which was common after the market crash of 2007-2009 but has no traction in the current market, and those deals are falling apart. The market never belongs solely to buyers or sellers, there is an ever-shifting balance and carefully surfing that wave has produced far more successes in my experience than a hardball approach from either side.