Real Estate Market Slow Down?
Let me tell you my experience for 2021 and how the past two weeks are a little different.
As I have talked before this 2021 Real Estate Market has been unlike any I have experienced. It is a strong seller's market and we've seen extremely aggressive appreciation (about a 20% price increase since January) because of the aggressive buyer contracts. Here is what it looked like just a month ago.
I would show a home to a client. The listing would already have a date of when they would be reviewing their multiple offers. I would call the agent and see how many offers they have and what we could do to have a competitive offer. Down in Weber county the low end for number of offers was around 20 and I saw as high as 60 offers on one property. Brigham was slower, the high end was typically around 20 offers. To make an aggressive offer you would have to have nonrefundable earnest money (and a lot of it, at least 1% of purchase price), you would need to have tight dates with possibly a free leaseback to the seller, You would need to offer A LOT over asking price, you would then need to either guarantee that offer no matter appraised value or offer a dollar amount above appraised value. You couldn't ask for any closing costs, you couldn't ask for a home warranty, you couldn't get away with getting any repairs or reductions on due diligence. If you had a government backed loan (FHA, USDA, and VA) then you were prioritized last and couldn't win the bidding war. It was extremely aggressive. Hence the intense increase in pricing.
Within this year I have seen many of my buyers drop off because they are discouraged with not being able to get an accepted offer or were priced out of the market (didn't qualify high enough or didn't have enough cash). I feel bad but there was just no way for them to compete. For my sellers they have cold feet. "If you sell you have to buy!" Though that is true they had a big advantage if they had a great amount of equity to swing into the new home.
So now you're asking, "What's different in the last two weeks?" I'll tell you. First thing I have seen multiple homes dropping in price. Not just a couple but at least 15 and I am sure there are more. That was unheard of at all this year. "So did they all just over price it?" Possibly.... or the more likely scenario is that demand has slowed down and it was priced according to demand. The second thing I experienced in the past two weeks is my offers making it closer to the top or getting accepted. I have submitted multiple offers. One was only $10,000 over asking and still had all the purchase contingencies, normal earnest money, and nothing over appraisal and was a VA loan. It got second place. Another offer that we actually offered lower with all the same contingencies would have won but at the last second the seller decided to not sell anymore.
So what does that mean? Honestly I don't know. Is the market slowing? It appears to be, but why is it, I don't know. Is it just the middle of summer and people were doing vacations and holidays so they didn't go and look for homes? or is it an indicator that the market is slowing down? Only time will tell, but these past two weeks the market appears to have taken a shift in the buyers direction.
It is still a seller's market even with the small (maybe temporary) shift. It is till hard to get closing costs covered and it is still hard to get repairs. You still have to be quick on homes, but it doesn't seem to have a ridiculous amount of offers for right now.
If you are on the fence about selling, now may be the time to start diving right in if it is starting to look like a market plateau. If you're thinking of buying it just became a little more possible. Contact me and we can chat through your options.
What do you think? Do you think the market is slowing? What do you think will happen to the market? I want to hear your input! Comment here or email me and tell me your thoughts!