First, shifts in the real estate market are normal. Historically, a shift in the real estate market happens about every 10 years and lasts about 4.5 years. Considering the last shift was the infamous “bubble” of 2007-2012, it appears we are about due.
To be clear, I don’t believe we are about to have anything close to another real estate “bubble,” so let’s all relax.
WHAT IS A “SHIFT?”
A shift is when the real estate market “shifts” from favoring buyers to favoring sellers, or in this case, from favoring sellers to favoring buyers.
This is the fourth shift I’ve experienced in my 30-year career as a real estate broker. Sellers have still sold, and buyers have still bought. We’ve always figured out how to adapt.
BUT HOLD UP A MINUTE!
I’m not ready to concede a full-on buyer’s market yet here in Oakland County, I see us as being in the process of “balancing” at this writing. We are not a seller’s market anymore, but not quite a buyer’s market, either. However, I do believe we are heading there.
WHAT AGENTS, SELLERS, AND BUYERS SHOULD EXPECT IN THIS SHIFT:
- Agents need to be cautious about “challenging the market” in pricing. Even when I have staged a home to perfection, competitive pricing is still the key to a sale.
- Agents should stop worrying about “getting the listing” and deliver realistic market evaluations, adjusted properly for a sale. Sellers want to MOVE, not list.
- Likewise, sellers should beware of agents (or Zillow) who suggest tempting, but unrealistic values. It may be flattering but could cost market time and big money.
- Sellers should make prudent decisions regarding making updates to their homes. We can’t assume 100% return on all investments; however, we have to maintain our homes to be competitive in the market. (If you’re unsure on which updates add the most value, call me. As an Accredited Staging Professional, I can usually give you quick advice over the phone.)
- Sellers will need lots of patience. Market times will be a little longer and longer market times can wear on your nerves. Your agent needs to provide good market updates and sound advice.
- Agents, it’s a tricky market for us. We have to be savvy negotiators and ambassadors of goodwill for our sellers, all at the same time.
- Sellers have to be prepared for “entry” bids and be willing to volley a bit. Keep the stress in check and let your agent deal with that part. I think it’s always a good thing when someone is interested enough to write an offer. If you can’t come to an agreement, let the buyer move on. No stress needed, onward.
- Staging a home for sale is more important than ever in a shift. With multiple houses competing for the same buyer, buyers will be looking at each home much more closely.
- Buyers will finally feel some relief. They will have time to think about their purchase instead of feeling the pressure to jump on something. Personally, I think this is a good thing. Deals will be more solid with fewer falling through due to buyer’s remorse in having made a hasty decision out of fear of losing it.
- Buyers should be prepared to pay fair market value. A shift does not mean it is low-ball season and sellers are desperate; this is definitely not the case. Good houses are still going to sell for good prices.
THE BOTTOM LINE
I wake up every day dependent solely on this housing market so it’s only fair that I get to worry first. And I’m not worried.
At the risk of talking myself out of a job, I see no need to change your plans to “beat” the shift.
If you are ready to downsize, do that. If you want to upsize, you absolutely should. I think this shift is just the normal course of the market correcting itself.
Be prepared, but just keep doing you. We’re going to be ok.
Call anytime with your market questions or stop in and see us at the Kroger plaza on Silverbell and Adams.
Have a wonderful new year!