A reflection by Sabrina Caton | Janurary 8, 2018
With all the talk about the Bay Area Housing Market – it’s hard to decipher the message. Are we crashing? Is the boom over? Do I buy now? Or wait? What if I need to sell? What should I do?
There are great questions and as The Caton Team firmly believes, each client has a unique situation and set of needs – so what “they” should do is all relative. That’s why we offer a free, no strings attached consultation to help determine what is best for you. So please do not hesitate to reach out to us should you have any Real Estate questions. Email: Info@TheCatonTeam.com
The Real Estate market, much like the stock market, is made up of people. In Real Estate those people are Buyers and Sellers, Investors and Renters and the market is very much a mirror to what those people are thinking and doing.
Because the Real Estate market is made up of people, it changes as our habits do – often reflected as seasonal change. I’ve been a full time Realtor for the past 15 years, Susan over 20, and if there is one thing we Realtors get used to — is the cyclical change of our market. It is so steadfast, many check out during the slow months because they know, come Spring and Summer – that’s when the action happens. But is this realistic? To just buy and sell for two seasons? NO – it’s not – because life happens everyday!
People buy and sell homes for various reason – aside from the investment standpoint. People buy a larger home when they find out their pregnant, or a couple gets married and combines their space and their assets. People sell homes when they get a new job out of state, or the house they have is too big or too small for their current lifestyle. My point is, people buy and sell homes for more reasons that I can state – and those events happen every day. It’s part of life – so why do we over analysis and stress ourselves out with the cycle? Why do we try to time the market when no one has a crystal ball?
Real Estate has always and will always be a long term investment. Quick and high gains are unrealistic and truthfully – unstable. Couple that with the rise in interest rates over 2018 that directly impacted each Buyers purchase power. Throw in changes to the stock market and everyone is going to err on the side of caution. Which is wise. So is investing in Real Estate – as a long term venture. It is a solid investment – especially because we all need a place to live. Making NOW a great time to buy, while prices are soft and demand is low. Get in today – at today’s rates (under 5% last I checked) then hold onto your investment. You’ll be happy you did – because over time – Real Estate value will always rise simply becuase they’re just not making land anymore.
So what dictates price? Buyers dictate price – even during the frenzy. It is a Buyer who decides – ‘this is the house I want and this is how much I am willing to pay for it’. Come Spring, said Buyer may have lost out on a few houses and slowly that Buyer becomes more aggressive in order to be the winning bid. The frenzy is created by the same source who can tame it – the Buyer. So come Summer, those Spring Buyers who lost out on home after home, start sweetening the pot and overbidding. Whether a Buyer wants to overbid or not – write a few offers that get rejected and a Buyer will find out what it takes to become an Owner. Each market is different and requires a different strategy. Right now that Sellers market is in the past. For the first time in ages – we’re in a Buyers Market.
Th moment I see Halloween candy on display, I know the slowdown is coming – change is near.
What gets me is – why are Buyers doing this to themselves when they don’t have to? My personal business philosophy is – to be successful in Real Estate we have to think and act differently. That means doing whatever it takes to have my clients home or offer stand out from the crowd. To change it up and be the first to do so.
Which brings me to today – January 2019. The media is spewing a Real Estate crash when in reality – our hyper-paced market is simply – returning to normal – not crashing. Normal.
It wasn’t normal for homes to sell in less than one week. It wasn’t normal for a Buyer to have one chance to see a home before an offer date pushed them to move faster. It wasn’t normal for offers to line up after one open house. It wasn’t normal and it wasn’t practical.
Today, for the first time in what feels like ages, we have inventory. Meaning, there are several homes on the market, at several price points. With lower demand, offer dates are no longer pressing the urgency to make a decision and Buyers have a bit more of that much needed time. Remember, Real Estate is one of the largest investments in our lives – so it is important to take time and make the right decision. This type of market allows for that. Making the Winter Market a great time to buy!
The flip side – it may feel like the market is crashing if you’re selling your home this season. What drives up prices is the volume of qualified Buyers wanting to buy versus the volume of homes for sale. For the past several years we’ve had high demand and low volume – thus further escalating prices. Each Fall people turn from houses to holidays and demand wanes.
What is hard to consider – the $100,000 gains seen during the Spring Market isn’t going to happen if only one Buyer is on the house hunt during Winter. So Sellers are seeing $100,000+ price reductions and feeling like the market is crashing from under them – when in reality it is just returning to normal. In other words, demand has changed, and it doesn’t take an additional $100,000 to be the winning bid. (Which always makes me wonder why Buyers don’t take the bull by the horns and change things up! I’ve had the best success with my Buying clients over the Fall and Winter because they were the only people putting in the time! Anyway – I digress.)
For Sellers it is a hard transition. When Realtors look at the market we cannot determine the future but we can map out the past. Fall/Winter Sellers may have higher expectations because they are looking at Spring/Summer sales data that was indicative of that market – on that particular day and that day has passed. Today is a whole new reality. The Real Estate Market is a living, breathing entity. Like the people in it – the market can turn on a dime without any notice. So how does one navigate these uncharted waters?
Easy… be realistic, timely and see the big picture. Each Seller is in a unique situation so the answer isn’t cut and dry. I do believe in being in the “here and now”, being aware of the market change and adjusting the strategy. Often times waiting out the market is not the best solution. Sometimes it is. Sometimes renting a home out is a bad idea when you consider wear and tear. Though a great tenant is better than a vacant home that seems to age while alone. It’s a lot to weigh so it’s best to be open and flexible. The Caton Team strives for the best result regardless of market conditions and happy to sit down and work through the challenges with you.
Bay Area Real Estate started to slowed down in September on ’18. Buyers had grown tired with the insane pace of the Spring/Summer market and it showed. Add the fire and smoke in the Fall, deterring many people from even venturing outside. Each market is different. Last year in 2017 – our 4th Quarter was one of the most robust ever! 2018 an entirely different story. So how does one survive a changing market in 2019? Move with it.
If you’re Buying you’ve seen homes sitting on the market, some have had price reductions some have not. Don’t just sit there. If you like a home contact your Realtor and have them contact the Sellers Realtor. Communication is key in this business. If you’re a serious Home Buyer – you need to get offline and in front of a Realtor. We’re here to work with you and help you figure out these challenges. Remember, Real Estate is not a twisting of the arm but a meeting of the minds. Yes, Buyers determine price – but we can’t walk in with 1996 prices. Offers need to be realistic and doable. A Seller isn’t going to take an outlandish low offer just because – nor is a buyer going to overbid. Real Estate is finding that middle ground where all parties can obtain their goals and walk away – happy.
If you’re selling – and don’t have the luxury of waiting till Spring to sell – get on the market now. Move accordingly. Make sure you are priced right – knowing there won’t be multiple offers driving up the value. In Realtor lingo we say – don’t chase the market down. Meaning, if the market is in flux, you don’t want to sit online forever, you’ve got to adjust with the times. Markets move up and down from day to day, month to month, year over year. The key to being successful is moving with that market and keeping in line with your goals and budget. Don’t hold out for a price that doesn’t exist in the current market climate. Review your goals and timeline, be open and honest with your Realtor about your needs and wants and work together to achieve the goal. Flexibility is key.
Each market is different, each neighborhood is different and each client is different. I could go on and on but the bottom line is this – Buying and Selling Real Estate happens in real time. Today. The future is untold and the past is just a graph. If you want to own a home, get out there and look – open your eyes to the possibilities. If you need to sell your home, get the home show ready, price it right and work with your Realtor because together we can do anything.
The Caton Team loves helping people obtain their Real Estate goals – contact us anytime with any questions – we’re here for you.
Thanks for reading!
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