I’ve just calculated the current market conditions snapshot report for my market area, and I’m delighted to report that the craziness continues unabated. It’s getting crazier, in fact.
Oh, yes, I’m delighted to report that.
Delighted beyond measure, rest assured.
Let’s take a quick look at the numbers, which are also posted on the first page of this site. Just to make it easy for you, here’s a snapshot of the snapshot.
Notice that active listings are down from the previous month, and sold properties are up. These figures are both end-of-month figures; I believe that more properties came onto the market during April, but we sold them faster than we were bringing ’em in, so by the end of the month, there was actually a reduction in the number of active listings.
When there’s already a shortage of real estate listings, these are not the kinds of local real estate market conditions we’d like to see.
As you can imagine, a shrinking supply leads to increasing prices. That much is good, I guess, especially for sellers in financial distress. I would say that buyers need to heed the warning, but they need to do so with the full understanding that it is a very competitive real estate market for buyers. Buyers need to be aware that they have few choices in how they act and react; it’s best to keep one’s wits firmly in hand.
The real problem — for buyers, mostly, but also for sellers — is that with highly restricted supply, and increasing demand, prices are getting bid up quickly and substantially. So far and so fast, in fact, that the prices are going well beyond the listing price. They are also going well beyond the values the appraisers are willing to give the properties.
That leads to some problems, as you can imagine. Frustrated buyers, suddenly faced with an appraisal that does not support the price that was negotiated in the contract, are having to make some hard decisions. Do they pay the amount over and above the appraisal just so they can get the house and finally be done with all the looking/bidding/losing they’ve been doing, or do they walk away and start over . . . again.
Of course, if the buyers would go ahead and buy the property, even if they have to bring extra money to the closing to pay for the value above and beyond the appraisal, they would help establish new, higher values for the neighborhood. That would make it easier for the next buyer, but that can be a bitter pill to swallow, and not always possible for the current buyer.
It’s a tough spot all around, and there’s a lot of waiting for all the pieces to fall into place. That of course, starts with an increased inventory. With prices rising, it’s making more and more sense for sellers to make the next step. There are certainly lines of buyers waiting for them to do it.
Of course, if you need any assistance with any of this, I’m just a click or a call away. Don’t hesitate to reach out. I’m here to help, if you just let me know what you need from me.
With warmest regards,
Randall Brennan, REALTOR
Certified Negotiation Expert
Certified Investor Agent Specialist
Certified Distressed Property Expert
Certified Military Housing Specialist
So what’s next? Take your pick.