What is Different about This Market than in Years Past?
By Sherry Ajluni
I've been giving this question some thought lately. We've been through buyer's markets before, so what is different this time? A buyer's market means there is more than 6 months of inventory on hand. I am seeing inventory on hand creep up closer to the 12 month range in certain areas and price ranges again. It had reduced to 8-10 in some price ranges and areas of North Atlanta. This is peak selling season so we would expect some increase in inventory but there are obviously still not enough buyers out there to absorb that inventory fast enough.
So what is selling and what makes a buyer pick one property over another? Well, what we are seeing is that buyers not only want the great deal, they also want an updated property. Even properties listed at great prices for their communities tend to sit longer than they should if they don't have the latest updates. The kiss of death for some? White kitchen, white laminate or even white solid surface counters, old worn carpets, homes in need of painting (interior or exterior). Are they all cosmetic? Yes! If a house looks updated but has old HVAC units, will it still sell? Yes! Now, they have to work of course, but if they are old, we can get past that and get the house sold. That white kitchen, wallpaper, and other updating needed will hurt pricing more than outdated HVAC. I'm sure that's not what the HVAC companies want to hear, or the roofing companies, but hey, we live it every day, and we know what buyers are looking for!
Young buyers have their hands full with work or young families and don't want to take the time to do the updating. Older clients may have already been through that on their last house and just don't want to do it again. And neither has to if they just wait for the right house! I am seeing houses go under contract that are priced significantly higher than the ones that need updating- more than the updating might even cost to do. That doesn't surprise me for the buyers that are moving to the area that need to be able to just move in, but it does surprise me somewhat for those buyers that call themselves the deal shoppers! They look at foreclosures that look like the houses only Eddie Monster would love and think they are getting a deal (this takes me back to a saying my Dad had for my Mom after a full day of shopping - "you'd buy s**t if it was on sale!")They need to calculate what it will cost to update them! I've honestly thought about just listing our regular listings as foreclosures and watching people fight over them. Ridiculous. I'll give you an example... we sold a well maintained, move in perfect home in a nice community at $565,000. A foreclosure hit the market a couple months later at $509,000. The house was bid up to $551,000. What??? Were they looking at the same house I was? Yes, same floor plan as ours, great house, but needed work- paint, carpet, exterior work. So, did they get a deal? I would say NO! It's just like shopping in general, not everything that is on sale is a good deal. Or as Kenny Rogers said, "You have to know when to hold ‘em and you have to know when to fold ‘em". That would be a good reminder to those foreclosure bidders.
So, my advice to homeowners and those thinking of selling in the near future, get your homes updated, move in ready- granite, carpets new or nearly new, neutral paint, get rid of brass, good general maintenance, clean- and then list them as foreclosures! Just kidding. Do get them move in ready and updated, then call us to list them and they will sell! We have a good track record so far with over 30 homes sold so far this year. It's still a challenging market out there and you need a team that will fight for you. We haven't lost an appraisal yet either- don't know anyone else that can say that. Appraisals are coming in low; appraisers have to be very conservative. We haven't had to lower ANY of our purchase prices due to an appraisal coming in too low, and that is happening everywhere.
As always, please don't hesitate to ask if you have any questions at all about your area, community or individual home- from what to update to what's it worth? We're here to help! Write us at Info@SherryandMariaTeam.com. Helping you maintain the most value in the biggest asset you have...