A couple of “real estate facts of life” that are as sure as gravity itself below:
The market never stays the same. In May of 2013 the housing inventory in Orange County CA was at a fifteen year low and the interest rates for a 30 year mortgage were below 3.5%. I have never seen those rates in my lifetime and probably won’t again.
The result was MULTIPLE OFFERS. Sellers were in CONTROL !!!! Detached homes which came on the market and were not structurally damaged sold with anywhere from 5 to 25 offers. Condos in great condition would have anywhere from 10 to 40 offers. Then on June 16th of 2013 the interest rates went up to 4.75 (still great) and the prices had risen 10 % at least which caused the brakes to be put on the market. Homes listed in the summer or fall would just sit.
Spring 2014 was a good time to sell or buy because the rates were low and the inventory was better. As the spring moved on sellers typically over priced their homes while the actually sales prices were going sideways – not really up or down. Technically the market is still a seller’s market but we are now hovering around 90 days market time and expired listings are increasing. This means we are headed toward a balanced market.
When a seller has only ONE offer then the buyer is more in control of repair requests.
If you over price your home and drop your price periodically then you may end up with a good buyer but probably just one. Sure it only takes one, but now the buyer certainly can be a picky buyer and very demanding on inspections. A smart seller will do all he or she can to accommodate the buyer’s requests and keep moving forward.
If the seller had received multiple offers then the seller can leverage that into a stronger position when negotiating repairs.
A 1% increase in interest rates means the amount the buyers can afford will go DOWN by 10% ( or the buyer will need more down payment). Most of the experts are saying that interest rates will creep back up to the 5.5 or 6% by summer of fall of 2015. If the economy is humming maybe it will not affect the housing market all that much but if the economy is sputtering then the market will shift to a buyer’s market and it will be tougher to sell your home.
To discuss the value of your home call Ron at 949-456-0505 or email at Ron@RonBuckGroup.com