Suffering from real estate market whiplash? Me too!
How is it that a week ago, local real estate news read like this:
They offered hundreds of thousands of dollars over the asking price. But was it enough?
And this week, we're getting this:
Compass and Redfin are cutting their workforces as the housing market cools
To me, the change feels like someone flipped a switch and we are now living in the upside-down from Stranger Things. In my thirteen years working in real estate, I have never seen such a quick change in the market -- in this case, from a clear sellers' market, to one that's, well... not.
Heading into this weekend, there are 58 condos and single families in Cambridge and Somerville that came on the market LAST WEEK and are still available. By contrast, only 24 of last weeks' 82 total listings have gone under agreement. Compare that to a month ago, in the first week of May, when 23 of the 42 new condo and single-family listings went under agreement within a week. That's 55% then, and only 29% now.
And this is not a hyper-local Cambridgeville phenomenon -- I am seeing it in my suburban secondary markets as well.
While this is surprising and unhappy news for sellers, it is somewhat of a boon for buyers. I say "somewhat" because obviously, their buying power has been reduced with higher mortgage rates (read more on that subject here) and in many cases, diminished funds for down payments if they are cashing out investment accounts. But at least there is inventory, presenting them with actual *options* to choose from. AND... there is a chance they may be able to avoid a bidding war. Or at least maybe only have to face off against one or a couple/few other offers, instead of ten, twelve, or twenty-five.
So my advice to buyers who have been feeling beat up and ready to drop out of the market is: NO! Now is your time! (And btw, there are still decent rates out there -- I just learned that Rockland Trust, for example, is still doing 4.75% for 30-year fixed.)
And my advice to sellers is: Lower your expectations and try to be patient. I do believe that homes in our market WILL still sell -- it just may take a little longer and you may not see the 10%+ over asking that we've grown to expect.
Last comment on this... I began my real estate career in 2009, a time when even in Cambridge and Somerville, it typically took a few weeks or longer for homes to sell -- often with only one offer. No one waived inspections or financing, and a good rate was around 5.25%. But our homes held their value unlike many other places in the country. Sale prices didn't tank -- they simply leveled off. Guessing this is where we're heading now.
Deja vu all over again ;)