Prices are up. Time on market is down.
There are opportunities both on the buy and sell side of the market. Time for a checkup on your real estate strategy?
Rather than throw a bunch of stats at you, I’ll keep this short and sweet:
Its tough out there right now and people do “fight” over in-demand properties, but I can help you get through it.
If You are Buying:
Thinking of Selling?
Is the Real Estate Game the new Spy Game?
I’ve been meaning to get a post out about this for some time now, but a “wardrobe malfunction” last week put it front and center of my mind.
Allow me to set the scene:
Its 3PM on a beautiful autumn Thursday in the city of Atlanta. My out-of-town client is flying in to view several houses over the weekend. They texted me about a specific property and wanted more information on a couple of features in the home. The house was vacant, so I ran over to get a better look at what they were asking about, take some pictures, and to decide whether to add that property to our itinerary to view on Saturday.
I arrive at the home, make my way to the front door, and bend down to activate the lockbox and retrieve the key. Upon performing this completely reasonable, harmless, and relatively risk-free action, my belt decides that it can no longer take the strain, and explodes right there on the front porch. In what can only be described as clothing carnage, the buckle lay scattered across the battlefield in 4 different pieces.
Two things go through my mind:
1. I am so glad the client isn’t with me.
2. I really, really need to find the time to get into shape.
Now that I am very much reliving a high-school nightmare where my clothing stops functioning, I hurry my now-very-awkward-self inside to get situated. I fumbled with the belt for a good minute or so before surrendering to the sad fact that nothing could be done to fix it. As I gave up the fight, I looked up to see that I had been performing this embarrassing ritual dance directly in front of their DIY internet security camera.
So, a couple of big things to be learned here:
I do attempt to emphasize this to all of my clients, but a best practice during home shopping is to wait until you are safely back outside to discuss your feelings on price, condition, and your overall desire to purchase the property. Don’t give the seller the advantage in future negotiations by telling them exactly how much you love the property, and how much you may be willing to pay, before we ink the initial offer. With today’s technology and connectivity, you can never be sure that you are not being monitored.
I tried to keep this as brief as possible, but there is a lot of information to cover for a comprehensive look in a six minute video. If I moved too fast or if you have questions, I’d love to hear from you.
Inventory continues to be constrained and the market is still very competitive for properly priced homes.
Median Days on Market. Properly priced and marketed homes are still moving very quickly.
Median Sale Price and Median List Price are Moving in lockstep. Homes are still selling very close to list price on average.
Housing inventory is still very limited. New listings have crept up, but not nearly enough to flip us into an overall buyer’s market. Some of that inventory is going to get snapped up as we move into the next busy cycle closing out 2017 and into the early months of 2018.
Just a quick update for YTD market stats in Atlanta. Thinking of buying or selling? Opportunities abound.
Inventory is still low and properly priced properties in great condition move fast, but there are deals to be had.
Thinking of selling? The upward sales price trend has flattened somewhat heading into the late summer. Its impossible to precisely time any market, be it real estate, stocks, or virtual currency (get at me, Bitcoin millionaires). If the time is right for you and your life situation, the market is still at its highest level in years.
Time to buy? The right home is out there. Low inventory just means I have to work a little harder to lock it down for you. That’s what I’m here for.
First, let me state the obvious:
The Atlanta Metro Real Estate market is currently at low inventory levels. Fairly priced and affordable properties in good condition and in sought-after areas are often under contract within 24-48 hours.
We all want the deal of the century, right?
Nobody faults you for that. If you are dead-set on submitting a low-ball offer on a sought-after property in this environment, you must also be willing to walk away from the property if and when your bid is not successful. If you fell in love with the home and just assumed that you’d start low and come up if the seller didn’t bite on your first offer, you may be blindsided when they decline to counter and take an offer from another client while you are stuck considering your next move.
Hypothetically, let’s say you were trying to buy a well-appointed two bedroom condo in Midtown that just listed today for $350,000. No savvy negotiator pays full ask, right? Conventional wisdom and tradition tells us that list price is the starting negotiation point. So, you decide to open with an offer of $335,000 and see if they bite. Closing costs are expensive as well, so lets ask the seller to cover $6,500 of that and just see what they say. You’ve essentially made an offer that nets the seller $328,500. In a slower market, or maybe if the property has been sitting for a month or so, I wouldn’t necessarily advise against this strategy. In this example, that just isn’t the case.
Many times, this is what actually happens:
Another buyer looking at the same limited inventory in your price band and location goes in to view the property a couple of hours after you. They are also interested and have been looking at properties for weeks. They, unbeknownst to you, have the benefit of experience on their side. They have already lost out on two homes they loved because they were crowded out by stronger offers. They have impeccable taste, just like you, and also decide the property is suitable and decide to make an offer. Their agent calls the listing agent, who communicates that the seller is currently considering another offer on the property. Not wanting to lose out and waste more time searching, they submit an offer at $348,000 and ask for no concessions for closing costs.
Many sellers choose not to start a round of multiple offer/highest and best bidding in this situation. The reality is, the seller has two offers in hand and are quickly burning through their valuable first days on the market. Your offer is currently $19,500 lower than the other buyer’s. The seller does not want to risk alienating or scaring away the stronger offer with additional negotiation on the off-chance that you’ll increase your offer $20,000 just to compete. They accept the other buyer’s offer, and bid you adieu.
Fine, right? You win some, you lose some. We’ll try again on the next property…
Here is where I am going to get a little “meta”: Are you now chasing the market up?
Lets say this condo is in a high-rise development. You love the amenities (Hnnng…that pool is sexy, right?) and location and you really want to get a unit in this building. The neighbor down the hall from the one you lost out on owns a unit with the same floor plan. They noticed the unit listed for $350,000 and decide its time to sell. Just like you want the deal of the century, owners want the highest price for their property the market will support. They decide to list their home at $360,000… Assuming that this property is comparable to the original one, what do you think you would decide to offer? You’ve now placed yourself in a situation where you may be “chasing the market up”. You get the idea? Starting to feel a little like Bill Murray in Groundhog Day?
If you are home shopping in a highly competitive environment and think you have found “the one”, my advice is to make the strongest offer you are comfortable with and willing to commit to as soon as possible.