{"id":1166,"date":"2021-03-16T19:19:33","date_gmt":"2021-03-16T19:19:33","guid":{"rendered":"https:\/\/nohasslelistingblog.com\/?p=1166"},"modified":"2021-03-16T19:36:44","modified_gmt":"2021-03-16T19:36:44","slug":"hottest-seller-market-ever","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=1166","title":{"rendered":"Hottest Seller Market. Ever."},"content":{"rendered":"\n

Having been in real estate sales since 1979, we have learned that real estate is cyclical. Nothing lasts forever \u2013 although at times it sure can feel that way! That brings us to the seller\u2019s market we\u2019ve been in since 2015.  While most expected the pandemic to suppress demand and allow for a rebalancing of the market, the opposite happened. Demand remained above normal \u2013 but that is still not where the story lies.  The real story is about supply.  Or more correctly, the lack thereof.   Supply has plummeted to the lowest levels ever.  And new supply (i.e. sellers putting their home on the market to replenish the homes under contract) are arriving at a trickle rather than at normal levels.  Properties for sale are down 61% from this time last year.  Yikes.  Combined with still inadequate new homes being built, there are simply too few homes available to house those who wish to live here.  If we were old Mother Hubbard we would rightly say the cupboard is bare.<\/p>\n\n\n\n

This is all confirmed by Michael Orr of the Cromford Report:<\/p>\n\n\n\n

The housing market is experiencing moderately strong demand, but this is not the important matter. Variations in demand are almost insignificant. This is because the supply of re-sale homes is so poor it crashes below all time record lows almost every week\u2026The supply situation is the worst we have ever recorded, lower than the first quarter of 2005, which used to hold the record\u2026.<\/em><\/p>\n\n\n\n

Not only is the supply extraordinarily low, it has dropped by a large percentage since the beginning of the year. In a normal year we would expect to have more available supply in mid-February than we had at the start of the year. For example in 2015 active listings rose from 22,879 in week one to 24,041 by week 8\u2026 This is a 5% increase. In 2021 we started the year at 6,113 and by week 8 we have dropped to 4,731, a decline of 23%. This is unprecedented.<\/em><\/p>\n\n\n\n

4,731 homes for sale in MLS is a shocking number for an area as large as Metro Phoenix with 4.5 million people.  Further, about 12% of the 4371 are \u201cout of area listings\u201d meaning in Arizona but not in the valley. That brings the real tally of properties for sale to around 4,000 homes.   To put this in perspective, a \u201cnormal\u201d market would have around 28,000 homes for sale. Unprecedented indeed.<\/p>\n\n\n\n

Rebalancing & Prices<\/strong><\/p>\n\n\n\n

The law of supply and demand says when supply is inadequate for demand, prices rise.  In fact pricing is currently moving upwards at a rate that is breathtaking to sellers and agents alike.  We saw 3% appreciation in the last month alone! Within the first half of this year, it is possible we could see prices rise 30%.  But (there is always a \u201cbut\u201d isn\u2019t there?!) this market will not last forever.  At some point rising prices cause affordability rates to drop, and that will begin to impact demand.  This is how markets rebalance.  As demand falls, supply begins to slowly build.  Sellers sensing record pricing levels, come to market in greater quantities.  Builders continue to build to exploit higher pricing and previously unsatisfied demand. Supply begins to build in earnest.  The market then shifts into balance, with prices ceasing to rise or rising very slowly.  This will happen.  The question is only how soon and how high will prices have to go to trigger the rebalance.  Correction can take some time. <\/p>\n\n\n\n

Pitfalls of an Extended Seller Market<\/strong><\/p>\n\n\n\n

If you are a buyer, the pitfalls of an extended seller\u2019s market are obvious.  Multiple competing offers and spiraling prices can make buying a home a less than thrilling experience.  It takes perseverance, a good agent, and some grit to make it happen. <\/p>\n\n\n\n

If you are a seller, it would seem you hold all the cards \u2013 what pitfalls could lurk?  Yet in every seller\u2019s market we see the same mistakes made over and over by sellers. <\/p>\n\n\n\n

  1. Taking the first offer the first day of listing – Once a seller is listed on the market they are understandably excited to receive an offer.\u00a0 However, in a strongly unbalanced market \u2013 waiting a few days to collect multiple offers is a winning strategy for negotiating the most advantageous deal.\u00a0 We counsel our sellers to allow us at least a few days to attract multiple offers and create a bidding war.\u00a0 That strategy has often allowed us to get an additional 5-20% higher than list price!\u00a0 It is critical you hire an agent that has been through more than one overheated sellers\u2019 market so they know how to play the game to maximize your net.<\/li>
  2. Not negotiating terms – Once the highest price is obtained, other terms can be negotiated that benefit the seller.\u00a0 In some cases appraisals can be waived (i.e. the buyer puts additional cash down if the appraisal comes in below the sales price rather than the seller lowering the price to appraisal).\u00a0 Homes can be sold \u201cas-is\u201d avoiding the need for repairs.\u00a0 In some cases earnest money can be made non-refundable.\u00a0 Essentially, terms to protect the seller can be as vital to negotiate as price.<\/li>
  3. Pricing too high – This sounds counterintuitive in a red hot seller\u2019s market.\u00a0 Shouldn\u2019t any price work?\u00a0 Almost.\u00a0 But even in the best market, overpricing can still stop offers.\u00a0 Currently, 10% of the properties are not selling.\u00a0 Yes, even with only 4000 properties on the market, it is possible to miss the hottest market ever.<\/li>
  4. Doing it yourself – In a seller\u2019s market the easiest thing to do is sell a home.\u00a0 The challenge is to sell it for the most money. Any seller can post their home online or put a sign in the yard and get an offer.\u00a0 Sadly the \u201cdo- it- yourselfer\u201d is missing out on the competition that can be created by being on the market.\u00a0 And that can cost them the 5-20% upside that competing offers can provide.\u00a0 Additionally, just as overpricing is a mistake – some sellers underprice by about 10% due to the rapidly rising market.\u00a0 They simply do not have access to the market statistics that a knowledgeable agent has.\u00a0 There is a saying that the seeds of failure are sown in times of success.\u00a0 Selling yourself feels empowering \u2013 but sadly even the best of home sellers can cost themselves thousands.<\/li>
  5. Taking investor offers – If you have a cell phone or a mailbox, you are getting constant offers from investors trying to buy your home.\u00a0 It sounds so good \u2013 no commission, no showings, all cash, as-is!\u00a0 But let\u2019s be honest, investors do not represent your best interests \u2013 they represent their<\/u> best interests.\u00a0 They make money when they buy, not when they sell.\u00a0 That means they need to convince you that selling to them at their price is best for you.\u00a0 It is never best for you.\u00a0 Never.\u00a0 How can you be sure of that?\u00a0 Well look at what investors do \u2013 not what they say.\u00a0 They only buy for-sale-by-owner homes, rather than listed homes, knowing they will buy below market that way.\u00a0 But when they sell, they NEVER sell the way they bought – direct to buyers. They always sell on MLS.\u00a0 Why?\u00a0 Didn\u2019t they just tell you that you are going to save because there is no commission?\u00a0 Yet they hire agents and pay a commission when they sell!\u00a0 Investors know to get top dollar they have to be on the market.\u00a0 Just like you.<\/li><\/ol>\n\n\n\n

    Still have questions about this rapidly changing market?  Call us!  We are always happy to explain your options and get you the facts so you can make an informed decision that is right for you and your family. <\/p>\n\n\n\n

    Russell & Wendy (Mostly Wendy)<\/p>\n","protected":false},"excerpt":{"rendered":"

    Having been in real estate sales since 1979, we have learned that real estate is cyclical. Nothing lasts forever \u2013 although at times it sure can feel that way! That brings us to the seller\u2019s market we\u2019ve been in since 2015.  While most expected the pandemic to suppress demand and allow for a rebalancing of […]<\/p>\n","protected":false},"author":2,"featured_media":1167,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1166","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-market"],"_links":{"self":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1166"}],"version-history":[{"count":2,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1166\/revisions"}],"predecessor-version":[{"id":1169,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1166\/revisions\/1169"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/media\/1167"}],"wp:attachment":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}