Like my friend, a long time Washington realtor told me to today, I LOVE real estate. It’s just about all I’ve ever really wanted to do. Buy and sell houses.
In the past few weeks we’ve seen a bit of a shift in the local real estate market. What had been a very solid seller market, has further solidified to where not much at all is moving.
All the buyers have gone home (or have taken up tasks other than home buying—getting kids back to school for instance). Sellers that came to the party late, or got greedy and priced their prized estates too high, are sitting.
The financial institutions, after appraising everything at top dollar for the past few months, just to get deals to go through, are saying, “What the heck are we doing? This doesn’t make sense.” Suddenly, they’ve become much more conservative.
Here we are. The busy selling season is over. Kids are back to school—most of them next week. Listings are sitting, expiring or being cancelled.
The good news? There are still quite a few deals in the works—lots of “pendings” on the MLS. There will still be quite few more closings in the next month or two. (Real estate transactions often take a long time to complete.)
I’ve been reading articles on various pundits, and what they think the real estate market is doing right now. Gary Keller, one of the founders of Keller Williams is predicting a major shift in the market and is not bullish about economic and housing market conditions.
At speech before thousands of KW leaders, Keller said, “It wouldn’t take much right now to push us into a buyer’s market.”
Hmmm. Cause for concern? It’s a moot point, as they say. Matthew Gardner, in response to Gary Keller’s bullish prediction, has another view.
Gardner says, “I would challenge this notion and suggest that the inventory that is stuck on the market is not what buyers are looking for… Additionally, total months of supply – a better indicator as to the strength of the housing market – remains at about 4.5 months, which indicates that it is still a seller’s market.” Gardner relates further data as evidence that the market really hasn’t “shifted” at all.
So, market shift or no? The coming months will tell I think. Last year, sales were robust all through the fall and winter months. Things moved ahead nicely despite some new consumer protection regulations coming into effect that (temporarily) slowed down the closing process on home sales. These snags have resolves (slowly) over the last six months.
I can see locally that Gary Keller’s analysis seems most likely. Overall, the drought on suitable properties for first-time home-buyers (the biggest contingent of buyers) seems to be easing. Prices, which were rising astronomically in some nearby markets, seem to be stabilizing. To Matt Gardner’s credit, the local inventory does seem somewhat shopworn. Sellers, hoping to catch up the sellers’ market (!) aren’t generally doing a lot to get their properties ready to sell. Not many upgrades, and quite a bit of deferred maintenance. That would have played a few months ago, not now. Short version, there is a lot of very over-priced junk on the market.
I have no crystal ball. I don’t have the experience or the audience of a Gary Keller or a Matt Gardner. I read a lot and what I see is that things are changing. There is a real estate cycle. Most economists say it’s a 7-10 year cycle. Let’s see 2008 plus seven to ten years?
Hopefully, any changes that are coming down the pike won’t be as quick or disastrous as the 2008 “bubble years”, but it doesn’t hurt to be prepared.