In the early days of Monday Night Football, the former pro-quarterback-turned-TV color analyst Don Meredith would break into the country song, “Turn Out the Lights … The Party’s Over,” when the momentum shifted to one of the teams on the field. While it’s too soon to declare the party over for the robust seller’s market, the pace has undoubtedly changed. The changing housing market means It’s time to adjust your selling and buying strategies with your clients.
Look forward, not backward
As the housing market begins to normalize, prices remain higher than a year ago, so there’s still considerable price appreciation in the housing market. However, the price escalation rate has slowed, and pending sales numbers are declining. With volatile global markets, rising inflation and interest rate increases, it is time to prepare your business strategy to transition from a robust seller’s market to the beginning of a buyer’s market.
On the listing side
As a seller’s agent, setting the right price at the start is trickier in a decelerating market. One thing is for sure: Although comps are the ubiquitous tool for price setting, a transitioning market means you cannot rely solely on rearview-mirror pricing. Gather comps for sure, but factor in the current mood swing in the market.
Do not panic and slash the listing price on a home, leaving your client’s money on the table. But don’t price at a “sky’s the limit” level, either. Instead, prudently pick an optimistic asking price that reflects the changing housing market.
On the buy side
Remember that inflation has jacked up the cost of everything, and buyers are paying more for daily living. This takes a big bite out of savings that could have gone toward more square footage. Additionally, rising interest rates mean monthly mortgage payments are hundreds of dollars per month higher. In short, buyers’ budgets are squeezed.
As a buyer’s agent, the changing housing market means you have some negotiating leverage again. Bidding wars are fading, and you can submit a reasonable offer and expect real consideration. You can once again ask for seller concessions and get closing dates your client can live with, and you won’t have to compete with as many all-cash offers.