REal Talk Jan 12 2023 – Should I Stay or Should I Go?
Should I stay or should I go?? Not sure if you should move now or wait? Tune in to hear what we’re seeing in the market that might help guide your decision making…
Oh, we’re filming.
Take one. Okay. So yesterday I had a great conversation with um, some clients who asked, I think a question that a lot of people are wondering, should I sell this year or should I sell next year? He said, I really want to wait until next year because of personal priorities and we’re just not ready. But my partner is really anxious that we’re gonna miss the boat. So what would you have said to that question?
I would say we only know what we know right now and what this season ahead of us is doing and looking like. And to that end, it’s a great time to sell primarily because we have such low inventory. And we have firsthand experience with a lot of buyers who are waiting and are eager and we still are seeing a lot of families move out from the city and there’s just a high demand right now and very low inventory. So that is going to continue to drive up the prices and we know that for sure. We don’t know what’s gonna happen a year from now. If you want speak to interest rates, I think.
Yeah. One, I agree with you one point. I think it’s always important that, um, you are ready for the move, right? We always like you personally, have to be ready for the move and make sure it’s the right time in your life. With that said, to Bonnie’s point, we know that the market right now, there is no inventory and we have a lot of buyers. We were actually just, we had our market center meeting where they talked about absorption rates and interestingly, they’re falsely inflated.
Kelly, what are absorption rates before you go any further? I don’t know what that means.
So absorption rates, um, basically is a supply and demand calculator used when looking at the real estate market. So it shows the amount of inventory and how quickly that inventory is moving based on the demand. It’s falsely high, which makes it look like it’s inch inching towards being a buyer’s market because the inventory that’s on the market is sort, is sitting there. It’s not meeting the buyer’s demand. It’s not that the demand is not there, it’s that the supply…
And that’s a great question that I will follow up with. Sorry for interrupting
Actually this, this particular client said, well, there’s a house on my street that hasn’t sold. Why is that? If you’re telling me that it’s still such a seller’s market and there’s so little inventory, how could it be that there are any homes that haven’t sold?
Right. Well, maybe it’s priced too high. Maybe there’s no staging. Maybe it smells like cat urine. It’s always funny. There’s a lot of reasons why a house doesn’t sell, but yes. If it’s not priced accurately is the number one reason and not prepared accurately. So again, that’s why it matters who you choose to help list your house because you need someone who has an eye and knows the market and knows marketing how to prepare and list and market your home.
Right. The market fact is that every price sells for the, uh, every home sells for the right price. So part of what I explained to him, him as well, just, um, piggybacking what Bonnie said is that, uh, there, there is that period of time in any market when it is normalizing or shifting where sellers and buyer or sellers and uh, agents have to adjust their expectations in terms of pricing. And pricing really is a marketing tool. It’s not what the value of the home is. It is a starting point for the auction. And at the point of last, I guess, no, when was it that the interest rates started growing up? When the interest rates started to really jack up sellers were still in the mindset that they were going to get as much as their neighbors sold their house for a few months prior to that. Right. And they were pricing based on what they wanted to get rather than what they could expect to get and buyers were still in the habit of them adding another 10 to 20% to the list price and say they were saying, Hey, I’m not gonna pay that with this current interest rate interest. Right. So it doesn’t mean that that house wouldn’t have sold for the, the list price. It just wasn’t the right list price.
And I feel like we shouldn’t talk about it now, but this is a teaser for our next real talk. We should talk about on the buy side, different mortgage products and finance … financing options.
Yes. So, and interest rates do play a factor in selling and buying and whether buyers will buy. SAllll that to say there are a lot of workarounds out there right now. Different products. The rates apparently are supposedly coming down this week a little bit and we are seeing them slowly come back down. So it still is a strong market.
And just to punctuate that point about the interest rate and how that’s affecting the demand, we still have such a backlog of demand from 2020 and even potentially before that. We were already in a strong sellers market before the pandemic and the pandemic then just opened the floodgates to buyers who wouldn’t have come out here. And those people are not necessarily going away. Some of them did backtrack and go back into the city, which is great for the city. But we still have such a backlog of buyer demand that the inventory simply cannot keep up with it. On top of that, there are a lot of sellers sitting on their homes because they locked in at an incredibly low rate when they refinanced in 2020 to 2021. So if they already have a 3% interest rate or less, for some people like Bonnie, they’re not going to want to move unless they find just the right house at 6%.
So that is what is continuing to drive the low inventory. We still have high demand buyers are still looking for more office space, home office space. And they still want to be close to the city. Yes. So, bottom line, still a great time to sell, but to Kelly’s point, and I did, you know, echo this to this particular seller, it is up to you and your particular needs and priorities. And I also referenced our buyer, our seller last year, who was waiting to time the market and we said, you can probably wait till the fall. And she said, I can’t wait that long. I’m too worried about it. So if you are too anxious about missing the boat… Do not come back to us in 2024 and say, we said it was okay to wait. It’s really up to what your pain point is versus what you think you can get in return.
That’s right. We’re happy to talk. We’re here to help with you, whatever your situation is.
Yep. All right. All right. See ya. Bye.