“Buyers and Sellers Watch For a June Swoon as Market Cools Nationwide”
Is it really June already? Man, where does the time go. It’s so frenetic lately I often don’t know what day it is. Mid week is the worst with Tues-Thurs often being a blur, given it’s been a seven days work week for two straight years now. Don’t get me wrong, I love what I do and am blessed to work with (and around) some terrific people. So if it continues like this, I’m absolutely fine with that. I just don’t know. There may be a slight cool down coming and a return to normality, which is also fine, as long as my buyers or sellers get where they want to go. The big question is, at what cost? For that, we go to some recent data, both nationwide and locally.
Corelogic just posted another uptick of 20% appreciation over the last 12 months on their U.S. Home Price Insights. You’ll see some easy to read charts, along with some not-so-easy-to-read ones, but you’ll note a forecast of only a 5.9% increase in home prices over the next year. That’s a significant reduction and due in part to both the release of thousands of newly constructed homes throughout the country, but also rising interest rates and a declining stock market. But it is on prices nationwide, not in all areas. Predictions are that many of the smaller, regional markets may outperform that, albeit slightly. Home prices in the Bay Area and Marin are forecast to rise only 7%-9% which is our typical average and a far more normal market. Given there’s no new construction here, we’re still subject to higher interest rates and economic volatility in the stock market. We’ll see where we go, but a cooling will certainly be a welcome sight to many buyers, mine included.
Many of us busy, usually productive agents have had several buyers lose out on properties in the last few months. The normal 5-10 multiple offers pushed prices up into a range that none of us were comfortable with, for starters. Also, many winning offers are all cash with no mortgage, which isn’t a smart or safe practice unless your net worth is a 5X on whatever you’re purchasing. Always carry a mortgage if you can, they’ve always said and I believe in that. Even if you’re paying 5% interest, after your tax write off, it’s much closer to a net of 3%. So if any of you have lost out to an offer that’s way over any reasonable value, don’t worry. Be cautious and be patient as if feels like the market will adjust to you, at least given all we’re hearing and reading.
Sellers? Step lightly and with great caution also. Listen to your agent and do all the required fix up, no matter how long or for how much $$. When you’re ready, check your Zestimate on Zillow and don’t be afraid to price 5% under that. You may have only one chance to grab a buyer in the next thirty days, no matter what month that thirty days is in. If you price it right, you could still see multiple offers (as we’re seeing here). If not, you’ll be priced to sit, not priced to sell, with buyers looking at what’s wrong with it, not what’s right with it, which is happening here too and everywhere else. The selling season is now and usually only goes through July for the most part. If you don’t want to really sell and just want to try it and put your toe out there in selling pool, go ahead. Most agents will work with you and invest time on your behalf as you never know what may happen.
That’s it for now. It’s a whole new world and I for one am very curious to see what happens. In my thirty-five years of doing this, I’ve never seen anything like what we have right now with strong demand and limited supply, coupled with a very dynamic, ever-changing economy. Until next time, enjoy June wherever you are and please stay safe. As always, thanks for reading.