Hello Columbus!
Can you hear me from inside these walls?!
If I’m being honest I have wanted to do this for a long time and now that we are socially isolating (let’s face it, that’s what it really feels like) because of the…ugh, I can’t even say it! Well, no time like the present I suppose. Blogging starts…NOW!
Up until just a couple of weeks ago, it was business as usual. Very busy start to the spring buying season and on track for a great first quarter. Just the other day, someone asked me if we were in a buyer’s market or a seller’s market.
First, let me explain the difference between the two. In a buyer’s market, we have an abundance of homes on the market for them to choose from. An increased inventory means the buyer doesn’t necessarily have to make a quick decision and they are in control. i.e. more inventory than there are buyers looking to purchase a home. In a seller’s market, we have fewer homes on the market and a large pool of buyers, essentially competing for what little is available. Sellers reap the reward of that demand and often pushing the price of their home up and they often get multiple offers over asking.
My response to their question was “both”. They looked, one eyebrow raised, and so I explained my point of view. With the lack of inventory, or “fast” inventory as we have been calling it, (homes come on the market and exit faster than the speed of light) and the high number of buyers, naturally you would say we have a “seller’s market”. But, that seems to only be true until there’s a contract. Then, there is often a shift in power.
Suddenly, we have a buyer who has paid a premium price often over asking, sometimes having waived contingencies and sometimes not, that’s calling the shots. Troubling home inspection? No problem. They’ll walk, never having had an emotional connection to begin with. Not getting the response to their request for repairs? They’ll push, hold firm, or hit the road, leaving the seller scratching their heads thinking they thought they loved the home! Truth is, they don’t always fall in love with the home in the beginning anymore. In fact, my advice to buyers: “Don’t fall in love just yet”.
Hearts will sometimes be broken.
I coach my buyers to keep emotions aside. For the seller however, it can be a rollercoaster. Will they toss in a load of cash for repairs? Will the buyer walk? Stay? Will it appraise? Should they even pack?? Even with the lack of sitting inventory, buyers feel pretty confident that another home will come along if this one doesn’t work out.
So yes, just based on digits, low inventory and a large buyer pool equals a seller’s market. But who wears the pants in the relationship? That is up for grabs.
Now the looming question: Will Covid-19 (eek! I said it!) shift our market? I think it’s too soon to tell. Things are fragile, yes. We are in uncharted waters. We are figuring out what to do one day at a time. But most importantly, we are in this TOGETHER.
We WILL get through this.
