Market Friction: Why Some Homes Sit While Others Get Multiple Offers

10 minutes ago

6 min read

The real estate market is changing again, and if you are thinking about making a move right now, you may be feeling some friction. I want to talk about what is causing it, what I am seeing over and over in our area, and what you can do about it whether you are buying or selling.

https://www.youtube.com/watch?v=V7I3OgHxwss

We Are Heading Toward a More Balanced Market

For the last several years, sellers have had the upper hand. That is shifting. We are no longer really in a true seller's market. Inventory is still lower than it has been historically, so things are not fully in the buyer's favor either. What we are moving toward is a more balanced market.

The numbers here in Rockbridge County show that shift. At the end of September there were 106 active residential listings in the county, and we were sitting at about 5 months of supply. A year earlier it was closer to 3 months. Homes that sold in September spent an average of about 85 days on the market.

In a balanced market, neither side gets everything it wants. And that is exactly where the friction comes from.

Where the Friction Comes From

There is a trend I keep seeing on repeat, and it starts with sellers. Sellers know they still have an asset that is in demand, and they want the highest price for it. At the same time, many do not want to go out of their way preparing the home for the market.

That is causing buyers to turn their heads. Buyers have been waiting out this market for a very long time. They have been fighting higher home prices and higher interest rates. They have been this patient, so they are willing to wait a little longer for the right home at the right price.

Closing the gap between what sellers expect and what buyers are willing to do is where the challenge is right now.

Two Very Different Kinds of Listings

Here is what I find really interesting, and it shows just how much a well-positioned home matters. Right now we have two camps of properties.

Homes that are getting almost no activity at all. Very few showings, no offers, and they are just sitting on the market.
Homes that come on well priced and well prepared, and they are still receiving multiple offers.

That creates frustration on both sides. If you are a buyer, you may still be competing for the right kind of property, even while there are plenty of homes sitting on the market waiting for the right buyer to come along.

If You Are Selling: Price and Preparation

I cannot say this enough. Pricing is going to be the most important thing you do in the market we are in right now.

In real estate there has always been a range. It is never one magic number. When we look at the sales data, there is a more modest, conservative value on one end and a higher price point on the other. Historically, we would often recommend listing somewhere in the middle of those numbers.

Right now, you are best off listing on the value side, toward the lower end of where the comparable sales are. Buyers recognize value when they see it, and a home priced that way is the one that gets the showings and the offers.

The other piece is getting your home ready for the market. You have to make the investment in repairs. If your home needs some improvements, take care of them. Some light staging can help too. Your goal is to make your home the most attractive property it can be, and in this market that effort pays off.

If You Are Buying: Don't Try to Time the Market

If you are tempted to sit back and time the market, I want to encourage you to think twice. That is usually not the best strategy. People who tried it several years ago are living with regret, and the same thing could happen again.

There is a lot of pent-up buyer demand out there. When interest rates come back down, I expect we will be back in a more competitive market, with more buyers going after the same homes.

So right now there is an opportunity. If the timing is right for you and you can afford it, this can be a good time to make your purchase. Homes are sitting on the market a little longer, which can mean more room to negotiate. And if rates do come down later, refinancing may be an option to get you into a better rate.

Let's Make a Plan Together

A changing market does not have to feel like a tug of war. Whether you are getting ready to sell or hoping to buy, the right strategy makes all the difference. If you would like to talk through pricing, preparation, or how to put together a strong offer, reach out to me and my team. We would love to help you find your way home.

Read the video transcript

Well, today as we are in another rapidly changing real estate market, I want to talk about a friction in the market that you may be feeling if you are looking to make a move right now. So as we trend into a changing market, we are no longer really in a true seller's market while inventory is still down. It is not fully in the seller's favor, but yet we're not in a buyer's market either. So we're kind of headed to a little bit more of a balanced market. But with that being said, there's a fascinating trend that we're seeing kind of on repeat. And here's how it could affect you if you are looking to make a move.

So trend number one is sellers. Sellers recognize that they still have an asset that is in demand in the marketplace and they want the highest price. They don't necessarily want to go out of their way preparing the home for the market too much. And that is causing buyers to sort of turn their head because on the buyer side, they have been waiting out the market for a very long time. They're fighting increased home prices. They're fighting these higher interest rates. And they're kind of at the point where they've been this patient, they're willing to wait a little bit longer. And closing the gap between those sellers and buyers is where the challenge is coming in at this time.

The other thing that is really interesting, and this just goes to show how well-positioned homes are selling in this market, is we have really two camps of properties. We have homes on the market that are getting no activity whatsoever, almost no showings, no offers, and they're just sort of stagnant in the marketplace right now. And then we have ones that come on that are well-priced and well-positioned and they are still receiving multiple offers. And so it creates sort of this frustration because if you're a buyer, you still might be competing for the right kind of property and yet there's all these homes that are sitting on the market waiting for the right buyer to come along.

So what is the cure? Well, let's talk about that for a minute. First of all, if you're a home seller looking to enter the marketplace, I cannot express enough how pricing is going to be the most important thing that you do in the current market that we're in. You know, we have always had a range in real estate. It's never going to be one magic number. There's always going to be the sales data on the more modest, conservative side and your high price point in the market. Historically, a lot of times we'll recommend listing somewhere in the middle of those numbers, but right now you are best off to list on that value side, on that lower side of where the comparables are, because buyers recognize value when they see it.

The other thing is getting your home positioned for the market. You have to make the investment into repairs. If you really need improvements, maybe some light staging, you have got to make your home be the most attractive property that it can be. And it will prove to be a good outcome for you in this marketplace.

Now, on the other side of that, buyers who are tempted to time the market, I want to really encourage you that that is not the best strategy. People that did that several years ago are living in regret and you may be doing the same thing now, because here's the thing. There is a huge pent-up buyer demand and as soon as those rates come back down, we will be back in some sort of a competing market. And so you have an opportunity right now that if the timing is right, if you can afford it, you should make your purchase. Homes are sitting on the market a little bit longer. There might be more room for negotiation, and as soon as those rates come back down, we can refinance you and get you into a better one.

So if you're ready to strategize how to be successful in the changing market instead of feeling the friction, then reach out to me and my team. We'd love to help you.