“You received ONLY ONE offer on your listing? Really?”
Seems like many agents are surprised when their listings don’t generate a lot of offers on their listings. We have become so spoiled when we receive multiple offers and over bidding in a seller's market.
But truly, it’s all relative -- it depends on the pricing strategy and what the requirements are. For example, on my recent listings, I cautioned buyers agents that if their buyers are going to write offers for significantly over the list price, that they should prepare to waive the appraisal contingency because my sellers aren’t inclined to negotiate lower prices if the appraisal is less than the offer. Furthermore, they have to provide proof of funds to show that they have the money to complete the sale. That seemed to have culled the truly serious buyers, i.e. from the sellers’ perspective.
Nonetheless, there does appear to be changes in the air.
So I checked our local MLS to see what is changing. First, I looked at the entire MLS area consisting of Alameda and Contra Costa Counties. Then I brought it down to a local level, the island city of Alameda (population: 80,000 people). And here’s what I found.
ABSORPTION RATE - from REALTOR.com, this shows how many months it would take to sell ALL the homes for sale at the current rate they are selling. The higher the number, the more aggressive the home sellers will have to be to get their home notice and sold. The lower the number, the more aggressive home buyers will have to be in writing their offers in what may be a competitive sellers’ market.
MLS Area
From 1 month in January, to 2 months by end of July
City of ALAMEDA
Started with 1 month in January, dipped in March, and back to 1 month
AVERAGE DAYS ON MARKET - shows the number of days from the time a property is listed to the time an offer is accepted.
MLS Area
City of Alameda
INVENTORY AND SALES - How many are actively offered for sale, and how many closed escrow? Note that at the time of this writing, we still have a few days left in the month of August. However, one can see there’s a definite pattern here. Sales have dropped, while number of homes for sale increased.
MLS Area
City of Alameda
The question begs to be asked: Are we returning to a normal market? What is normal?
See: “The Newest New Normal” where In May, Dr. Villacorta described his New Normal in more detail.
“Certainly the expectation for moderation is less flashy than home prices racing their way back to pre-crisis levels. Yet moderation provides a sense of stability that is essential for both consumers and lenders, as it allows for both parties to calibrate to the current housing landscape,” he wrote.
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