The real estate market is shifting. While the cost of housing remains completely out of reach for many first-time home buyers and homes are still selling within hours of being listed, the market is shifting, leaving both buyers and sellers in a state of confusion.
“We have been saying for the past year, ‘when will we hit the top of the market’,’’ said Tri-Valley real estate agent Liz Venema of Venema Homes Real Estate Team. “Well this is it. We have arrived.”
“Everything changed in April. We thought it was spring break at first,” she continued. “People are travelling again and, where we were once seeing hundreds in just two short days at our open houses, it all of a sudden was a ghost town. Buyers are now being told by their financial advisors to wait to purchase.”
Venema disagrees with that advice, noting a better approach would be to focus on rate instead of time.
Although inventory remains low in the Tri-Valley and elsewhere, Venema said a number of factors -- including rising interest rates, inflation, gas prices, the conflict in the Ukraine and bidding wars for homes -- have made buyers weary.
Likewise, selling a home has become less ideal as sellers can’t afford to purchase another home in the Tri-Valley and are not receiving the same high offers they were just last month.
“We were getting multiple offers, sometimes over 20 on a property and the price was going for thousands over list price,” Venema said. “We just had our first house in over a year not go pending within seven days of being on the market. We received an offer but it was much lower than the sellers expected. There was no frenzy, no multiple offers, nothing to raise the price of the home during discussions.”
Anecdotally, Venema said her real estate group went from seeing more than 200 buyers tour a home over a short period of time in March to 20 people touring a home over the same timeframe in April -- a 90% decrease.
“Sellers need to hone their expectations. Our market has shifted,” she said. “Today, sellers need to price their home correctly and have their home updated so that it is move-in ready. I have seen multiple price reductions just this past week.
“Sellers who are thinking of selling should do it now or within the next few months,” Venema continued, “as the experts tell us this decline will be with us through the fourth quarter of this year and through next year.”
She said certain homes - those with updates, curb appeal, desired school districts and that are move-in ready - and homes placed on the market at a reasonable price based on comparable factors continue receiving multiple offers.
Venema said her team was able to get four homes sold through pre-emptive offers, but the tactic doesn’t always work for every sale and it’s the responsibility of the real estate agent to share their knowledge of the current market with buyers and sellers.
“It’s always important to ask what our client’s motivation is,” Venema said. “If it’s downsizing, transferring or reducing their commute, those are the clients who don’t care about what’s happening in the market because they’re motivated to sell or purchase. But clients who question if it’s the right time to buy or sell need to be educated, and it’s my duty to educate my clients to get them the best real estate experience.”
Because shifts in the market can occur quickly, Venema said one of the most important things agents can do is educate themselves, anticipate fluctuations, manage their seller’s expectations and help their clients plan accordingly.
“What a lot of people don’t realize is that the real estate market is a market; like the stock market, it fluctuates,” she said. “You want to be ahead of the real estate market, not chasing it. This puts you in a place of power.
“There is no reason to waste energy on wondering if you should have sold earlier this year,” Venema continued.
“The current shift is still fantastic for sellers compared to previous years, but we have reached the peak and we are going to head down the other side. Be ready, be informed and come from a place of power.”
To learn more, connect with the team at Venema Homes online.