Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
Hypothesis: It's now a buyer's market. Some of the agents, who often only participate in one transaction every month or two, and are thus unaware, leading to some quirky anomalies (since buyers/sellers trust their agents to tell them "how things are"). But overall we're seeing price drops outnumber bidding wars or price increases.
@Chris Mason supply is finally catching up with demand, and in some areas of the country, outpacing it, with home prices beginning to stabilize. At the same time, it's important to remember that not all markets are like 2/3 of CA where there is year around good weather. In most areas of the country, the seasons play into the market, with sales traditionally falling off in the fall, with sales to families with children slowing after school starts, then another spurt of buying before the holidays, and settling down until Spring.
Personally, I think next spring is going to be when we will know where we are at. However; I do agree many markets are seeing a slow down right now.
Well, I have no real statistical facts yet here in Central Florida but my local market watching has seen some small price drops on maybe 10 percent of homes listed on MLS. To me it is because they listed a little high to begin with to push the threshold. What I see here in my local study is homes with no real upgrades and needing some updating sell for $120-140 sq ft. If they have been modernized with granite and recessed lighting and upgraded tile showers they can be pushed as much as $180 a SQ foot. Almost all properties will sell or be pending within 30 days if priced Right. There seems to be a buyer for every property.
Normally September has a slowdown but it seems to be holding steady with new listing coming on the market. We won't see real inventory numbers posted for a while by board of realtors. New condos and new homes are still going on. Most new construction sfh will be in range of 400k to 700k. I don't know what people can afford all of these homes. It sure isn't Amazon 15.00 an hour employees. I think next spring will be our indicators. I think many people are overextending themselves but everything appears strong in Florida. I welcome any other Floridian comments.
I think that "retail" sellers and agents are caught up in the hype of the appreciating market and overpriced their properties. Their hope was is continue pushing the market up but, in doing so, priced themselves above the property's real value and the market wasnt buying (figuratively and literally).
Tech savvy home owners here only trust their own data. Yes, Zillow, Trulia, Realtor, and Redfin guesstimates have gone up. Although the mentality is their addition projects are worth way more than what is the perceived worth. On home biddings, one still has to pay 105-108% over asked price with a few days longer on the market vs. 110-120% or better neighborhoods (120-140% over listed price) with 1 week marketing. Multiple offers are the norm. With 20% more inventory there is still a severe shortage of SFHs. It has been that way for 40 years. Rental demand have gone down as people will balk at $5,000-10,000 monthly rent. That is the mortgage owner pays. As long as high tech, social media companies are throwing money away with freebie shocking RSUs and paying college interns 6 figures little will change to housing industry.
All that being said, we now have manufacturing jobs in this high cost living SFBA. Tesla employs 10,000 at old Nummi & Solar Fremont plants. $26 an hour and high stress does not get far here. Using expensive clean rooms for staging car parts is something only Elon would do.
I would agree in some areas of the country it is a buyers market but the hypothesis won't be correct in all areas. In NJ I still see it as a seller market but this can be a shift soon which I don't mind at all.
@Chris Mason I don't have stats to back up my opinion, but my local observation is that houses are sitting on the market longer and we are seeing price drops. Price drops are putting pricing in line with what we saw in the spring, so it is more of a leveling. In my market this is generally a slower time of year too, so that plays into it. I will agree here locally it is more of a buyers market than it was a couple months ago.
Not in my market, we are in a seller's market on par with 2006 levels. Our seller's market is being driven by lack of inventory and amount of families moving here daily. We just had the best September on record and are starting October off very strongly due to demand. Days on market for most areas of Charleston is less than 7 days.
@Chris Mason That old adage...RE is ALWAYS local. I'm seeing that locally prices are settling down and listings are sitting slightly longer. Supply is definitely catching up. Our market was pretty much flat from 08-13, so even in a recession, markets vary greatly.
We’re seeing inventory pick up a little bit and time on the market increase slightly in the $1.5M and up range here in Boulder. But entry level $600k-$1M segment is still red hot with bidding wars and homes selling for more than list price. Same for MF investment properties. Sellers are still in control. There was recently a $1M price drop on a $10M listing, not sure that indicates a buyers market unless you’re shopping for a $9M mansion though lol.
I do small, specific-event postcard mailings of about 8 per week. I hand-write their name & address and use real stamps. My response rates are up about 300% vs 5 months ago.
Seasonality is definitely part of it, but I sense more flexibility and motivation than the dismal responses and rates of the last few years. They are looking for solutions more now than a sky high price in cash tomorrow.
Something's up, I agree. I sense my off-market sellers are starting to look for a chair overall. As a buyer I, too, feel more reluctant and am assigning more to my list of excited newbs and owner-occ hopefuls.
I certainly don't regret selling my 3 least faves over the last 11 months...
I have towns near me with 2 months of inventory. There was the normal bump in listings in Spring, but that's all eroding now. Many of the towns near me are in the 2-3 month range. Only one of the towns near me is around 5 months.
What I have seen, though, is a large amount of BPO requests for distressed properties across all price ranges.
@Chris Mason about 5 months ago I mentioned that things were changing pace, because I had been looking religiously for a deal. Now I notice a lot of price drops. So I would agree with you, its becoming a buyers market. If not, already a buyers market.
Still deals to be had around here (OKC). Am seeing a little slow down as far as homes sitting lower and price drops, but this is to be expected around this time.
In northern california there certainly is a flattening of the market. Seeing more price drops and less bidding wars. Feels this is very true for SFH and somewhat for mf (10+ units). Interest rates are climbing, Also, prices have been listed at the high end initially and sellers are adjusting them lower as market is softening. For mf, cap rates may start easing after compressing so much over the past few years.
I'm seeing the multi family market here slow down, with numerous properties listed on MLS being dropped in price. Of course, I personally thought almost every one of them was overpriced in the first place. I was outbid on 3-4 properties and wondered how the heck any of them could be cash flowing at the prices they sold at. Just sticking with my numbers, and not buying until it works, whatever the market "says".
I'm seeing the multi family market here slow down, with numerous properties listed on MLS being dropped in price. Of course, I personally thought almost every one of them was overpriced in the first place. I was outbid on 3-4 properties and wondered how the heck any of them could be cash flowing at the prices they sold at. Just sticking with my numbers, and not buying until it works, whatever the market "says".
Same here with small multis. Selling this spring at a 4 cap and GRM of 15. What?? I'm a buyer at a GRM of 8-9.
I asked a couple of the listing agents who was buying these things? Multiple offers within a week. Unrelated partners/members in LLCs was the answer. Partnerships basically.
After paying a bad local PM to manage, their return will be under 3% tops. Negative is possible. Tomorrow's motivated sellers. I give them 3 years before tapping out. Stick to your criteria.
@Paul Choi seeing the same in Palo Alto. Things priced right sell fine, but the ones hoping to align their prices with the frenzied pricing of last year are sitting. This is the first time in several years when I’ve scrolled through listings in my area code and seen a slew of “Price Reduced” flags. That is new here.
I place most of it with just seasonal trends. Ya, sure I think the market is finally hitting that point where it flattens for a bit then decide to go back up or take a downwards correction but its NOT a buyers market. Not by a long shot. Just because there are not bidding wars and more price reductions does not mean the market is going down towards being buyer friendly.
Personally, I will wait till spring to see where the market decides to go. Not saying I wont buy. Just that the more stable numbers now are just season numbers IMO. Happens every fall/winter.
@Chris Mason Always market specific as we all know. That said, I am seeing things slow in SFHs. Both from real estate professionals and from my observations.
@Chris Mason - Funny you post that. I just call this morning from my lender that I should consider jumping into Indy market. He is based out of Chicago and lends in Indiana and Virginia. I have been doing lot of homework on investing in Indy market, and plan to make a move in late fall or early winter.