August 12, 2021
Seller Greed Shifts Real Estate Market
There has been a recent trend in sellers pushing to list their homes above market value, undermining the realtor’s experience and expertise-based price. There has always been a bit of a lag time between people’s digestion of what they think their home is worth and the news reports about the market. Right now, the market looks good to the average consumer. National Association of Realtors (NAR) mid-year report highlights that house prices are rising at record rates, interest rates are declining, new programs are opening doors for people previously ineligible to buy, and current homeowners are accessing cash from equity and dropping mortgage insurance. These factors have led to listing prices steadily increasing, especially in the suburbs and Midwestern metro areas.
While external sources push that the market is continuing to heat up, experienced realtor Jim Slater has a different insight. Mortgage applications have fallen to the lowest levels since January 2020, per the Mortgage Bankers Associations. Declines were specifically noted in both refinance and purchase applications. Rising home prices and low inventory rates are responsible for this decline. Buyer confidence has also been declining as sellers demand unrealistic prices. This can be seen in increasing days on the market statistics and decreasing rates of multiple offers and bidding wars for many homes. Jim Slater and other insider experts speculate that the housing market is cooling down.
Seller greed can kill the market as fast as it was created. It is only natural that after hearing about others cashing in big selling their homes, most of the population expects and chases the same. The challenge comes when people get so infatuated with this seemingly quick way from rags to riches that they start demanding unrealistic prices. When buyers experience this sticker shock over and over again, they become defeated. Educated buyers won’t buy overpriced homes. They study the comps aka what comparably sized homes in the area have recently sold for. They will go back two to three years, seeing how the average price per square foot of the homes in the area has shifted and a huge jump in just a few months is a red flag. The listing price must be defensible, which is why it is best to heed the advice of an expert real estate agent. If you are looking for an expert real estate agent with your best interest in mind, sooner or later you’ll call Jim Slater.