From Karen Starr, The Grubb Co.
Q: Is the red-hot seller’s market about to cool?
A: I don’t know about you, but I have begun to sense a change in the temperature of our local real estate market in the past few weeks. Maybe it’s because schools are almost out for the summer and parents’ focus has shifted to the challenges inherent in keeping our kids entertained for the next few months. Maybe it’s due to the “battle fatigue” that both buyers and their agents are experiencing as they have repeatedly put forth efforts of heroic proportion in their attempts to secure the home they desire.
Up until early May, new listings that were well-located, well-presented and well-priced were selling literally in days, with an avalanche of offers and at sales prices often exceeding asking prices by 20 to 40 percent.
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As we moved full swing into the spring market, inventory increased significantly, at least in the East Bay where I work and we now often seen fewer offers presented on new listings, with some homes even “languishing” for several weeks on the market prior to receiving an offer. Imagine that! I remember when 3 to 6 months was the “normal” marketing period for a new listing.
We are in a market transition of some sort here. Whether it is due to impending summer, buyer fatigue or increased inventory remains to be seen. Maybe it’s all of the above?
In the coming months we will most likely see asking prices more accurately reflect the actual current market value of the house rather than be priced in anticipation of the overbidding that was prevalent earlier.
Prices/values are not dropping; yesterday’s sales are the comparables used to establish current market value. Buyer demand remains high. The number of offers per listing may be fewer but houses will sell at closer to their asking price making it easier for buyers to gage where they must go, price-wise, in order to prevail.
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