The robust sellers-advantage housing market has resulted in today’s homebuyer being weary and cautious, understandably. Sellers have enjoyed the upper-hand in a market where there are more buyers seeking homes than there are available homes for sale. By many economists’ definitions, a ‘balanced’ market would offer four to six months of available inventory.
In Lane County today we have 2.3 months of available inventory of homes for sale. All indications point to a continuation of the appreciating prices in our market, albeit at a slightly slower rate. However, this does not mean that we will continue to see what we have previously from buyers and sellers. Buyers recognize that this market’s rate of appreciation is not sustainable, as home prices continue to rise at a rate faster than wages are increasing.
Over the years, the market has self-corrected, reacting to internal trends and external influences such as wages. As I continue to assist buyers and sellers in navigating the adjusting marketplace, I have observed those consumers who are acclimating quickly and thereby continue to maximize their opportunities. And I have seen buyers and (especially) sellers who are not making the necessary adjustments in order to be successful.
When today’s buyers have identified what appears to be the right house, the buyers develop a
“detached affection” for the house. That is, the buyers are determined to not overpay or buy the wrong house, no matter how much they love it – more so than we have seen in the recent past. It may be the right home by many standards, but today’s street-wise buyers are recognizing the significant financial commitment that they are making to the home, possibly the most significant purchase and asset of their lifetimes.
The buyers today are firm in their resolve to not overpay or over-compromise in their home purchase.
Given this resolve from buyers, seller’s may find that attracting a buyer requires more precision in the pricing of their home. Listing the home too aggressively may provoke a “swipe left” by the buyers, thereby clearing the house from their search, which eliminates the house from the buyers list of potential homes for them. After missing the price at the time of listing, it will take extreme price discounting in order to get the home back onto the buyers list. One courageous, but possibly rewarding strategy in this market is to slightly under-price the home initially.
The home will be a “deal,” and you will enjoy instant activity from buyers. It is likely that the buzz will bring the price up to ( or above) the market value. Your home must stand out as an opportunity to a buyer.
The potential home buyer’s mindset today to not ‘over-compromise’ must be heeded by today’s sellers. Seemingly small deterrents like dated family-room carpet or moss on the roof will bring pause to buyers today.
The question in their minds is, if the home has outdated amenities or deferred maintenance that I can see upon casual observation, what remains under the surface that I cannot see, which will reveal itself upon closer inspection or over the passage of time (i.e. change of seasons, after the close of escrow, etc.)?
The good news is that buyers are still buying. Interest rates have remained very attractive. Our area offers healthy in-migration in the 2019-2020 forecast. With slight adjustments in your selling strategy, great opportunity still lies ahead for sellers.