By Kay Wilson-Bolton
June 18, 2006
Ah! It feels good to feel normal again. With the home sale market in our area changing from a hot, seller’s market to a more balanced market, we find that fairness is now the standard. A balanced market is one in which neither the buyer nor the seller has the upper hand.
When this sort of shift in home sale market occurs, we find a larger inventory of homes for sale. Therefore, it generally takes longer for homes to sell, there are fewer multiple offers and fewer listings sell for more than the asking price. None of this is bad.
As the inventory of homes on the market increases, buyers have more choices–and they tend to be pickier.
Sellers will be toning down their expectations as the market shifts. With more inventory, pricing homes for sale will be critical.
The price of a home is not known exactly until the buyer has worked through any inspection contingencies. In a market that’s racing higher price wise, inspections get less attention. When the market slows, buyers will take more time with their inspection considerations, and sellers may not be able to count on a quick sale and more than one offer to consider.
In general, buyers find less competition. This doesn’t necessarily mean there will be no competition. This will depend on where you’re buying and in what price range.
The recent increase in interest rates has been a major factor in the changing market. When rates first started to rise, buyers rushed into the market, and a buying frenzy ensued. This pushed prices up to record highs in some places. As sellers became convinced that the good times wouldn’t last forever, many decided to sell. And, the inventory of homes for sale increased.
This creates a dilemma for many buyers. Since more listings are on the market, should buyers take their time and wait to buy until something they like better comes along? Or do buyers move now to lock in an interest rate that is likely to be lower than it will be in the future?
The best advice is the same old advice. When you are ready to buy a home, buy it. Sellers who have owned their home for more than a year could still sell and likely make a profit.
The best thing REALTORS® can do for our customers is to stay steady, take our feet off the emotional gas pedal, and continue to do our job. We also need to mind our manners with each other as there is less business to go around.
Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and brings a regional perspective to local issues. She can be reached at 805.340.5025.