Friday, November 25, 2022

Happy Thanksgiving and Black Friday!

Well I do hope you all had a warm and pleasant Thanksgiving Day yesterday and I hope you score some killer deals Today on Black Friday! So this is a real estate site, any Black Friday deals on real estate? Not exactly.

Despite the perception, the Holidays can be a good time to buy and sell. I mention this every year and I'll do it again this year. There is a significant number of people that put off real estate decisions until after the Holidays. Sellers will suspend their listings or postpone until January and buyers will also wait until after and so in general December is a slow month for real estate.

However I've noticed that seller activity slows down quite a bit more than buyer activity in general. Sellers that suspend or postpone listing until after the Holidays are not in a hurry to sell. Sellers that remain tend to be ready to go or perhaps need to move quickly for a job change or something similar. Buyers can capitalize on the urgency of sellers that market during the hectic season and sellers can capitalize on serious buyers that are not just 'kicking tires' but are ready to purchase.

We all have plenty of things to do during December so we tend not to be looky-looing around in this month. The bottom line is that both buyers and sellers that continue their real estate activity during the Holidays tend to be very serious about getting into contract and that bodes well for all involved. For both buyers and sellers there is less competition and that can be a very good thing.

Have a great weekend, see you next week.




Friday, November 11, 2022

Market Sliding Gently into Oncoming Recession

The real estate market is sliding gently back into more neutral conditions. But is it really neutral? There are several ways to create balance and imbalance in the market. Balanced conditions happen when supply and demand are both about equal. You can have short supply with little demand, medium supply with medium demand, or high supply with high demand. In any of these conditions the market is neutral. A strong sellers market can happen when supply is short and demand is high, but it can also happen when demand is low if supply is extremely short. Our recent market transitioned from high demand and ultra low supply to medium demand and ultra low supply, to low demand with ultra low supply where we sit now. Yes demand has fallen off due largely to the increasing cost of money. But the number of listings remains fairly low as well so prices are softening, but only a little bit.   

If our market sees a sudden burst in listing activity we could see a harder crash, but for now, trends are showing a soft landing. Soft is good. Sellers worried about the declining market should consider that it can be an effective way to save a little money. If prices are falling the selling will lock in the price of the current house when they accept a buyers offer. The next house they buy will be a little cheaper as the market softens further. There can be an upside to slipping prices.

Mortgage rates right now remain in the 7s but most rates come at a cost in points. Par rates and rebate rates are not in the mix right now. Buyers will need to be ready to cough up some closing costs to get a loan and sellers should be ready for offers with buyers asking for help. This is the market we will have to deal with for the foreseeable future. It is totally manageable when you hire the right agent.


 

Friday, November 4, 2022

Chasing the Market Down

OK sellers,  there is a such a thing as chasing the market down. What does that mean? Well in a market where prices are falling, whether they are plummeting or just sliding gently down you absolutely cannot expect good results by overpricing your home or even pricing it based on recent comps. Because a typical home sale takes 30 days to complete so a house in your neighborhood that closed yesterday for $400,000 was actually negotiated 30 days ago or more. 

When you price at or above the current market and you factor in the increased marketing time of a stable market you will be overpriced by the time your buyer arrives. Buyers are not likely to make an offer on an overpriced home unless they absolutely love it. Meanwhile as the marketing time increases new competitive properties come on the market at even lower prices. So eventually you have to lower your price. If you lower it again to what the "current" comps suggest you fall into the same cycle and literally chase the market down until it starts to recover. In the end of this scenario sellers will lose thousands or perhaps tens or thousands of dollar. I have seen it before and I am seeing it now.

In a market will declining values a seller need to get ahead of the curve and that means pricing the home a little under the comps suggestion. Now the house looks competitive in the market place even 3-4 weeks into the listing cycle. It is better to sell it now than let the market fall further. This can be a hard pill to swallow, especially in the immediate aftermath of one of the hottest markets we have seen in decades. That market is over. Buy as of now the sky is not falling, homes are still selling and price reductions and valuation adjustments are still sliding south on a gentle trajectory. There is no guarantee that glide won't convert to a precipitous fall but it just as easily could be a minor bottom and return to growth depending on economic activity in the region and nationally over the next several months.

Don't chase the market down, you will lose way more money with six months of price reduction than just selling it quickly at a sharp looking price today.

Tuesday, November 1, 2022

Warmest October I have yet Recorded

This blog post was accidentally posted here instead of my Weather Blog... oops :)

You read that right friends. This October was a scorcher, well for October at least. I set more warm daily records than ever before in any month and this is my 21st October keeping temperature records at this location. 13 daily high records fell for this location and two warm morning low records as well. That is nuts. It gets nuttier because I also recorded my warmest temperature ever for October. Generally in October we get a couple of warm days in the upper seventies of maybe an 80º temp almost always in the first 10 days of the month. Then the rain train arrives and that's the end of that. Not this year, we had a proper Indian Summer with three weeks of warm weather mostly in the 70's and 80's. The end of the month was more like a regular October with rain and cool temps.

So what's all this fuss about? Here it is: October, 2022 featured the aforementioned 13 daily record highs, 2 warm low daily records, and the warmest October temperature on record at this location. All of this scattered among just 9 sunny days, 8 rainy days, and the rest were cloudy or foggy or partly cloudy. There were ten days in the 80s, and 12 in the 70s. The month was so warm we didn't get anywhere near freezing all month long with the coldest temp coming on the 12th at 38.7º and I had nary a frost. The the warmest temp of the month, my all time high for October was on the 2nd with 86.1º under brilliant sunshine nudging past the previous all time October high of 83.8º and 6º higher than the previous record for the day. The other daily records were as follows, 84.0º on the 1st which was an all-time October high for me for one day until broken on the 2nd, 81.0º on the third, 81.3º, 83.8º, 82.1º, and 75º on consecutive days the 7th through 10th, followed by 5 consecutive daily highs on the 12th through 16th with marks of 78.6º, 83.2º, 80.1º, 85.6º (8.8º above the previous daily record), and 81.2º. But we were not done yet breaking daily records, on the 20th a mark of 69.6º was enough to take the record. All in all this past October had four daily highs that were enough to tie or break the pre-2022 all time monthly record! We even added two daily records for warmest overnight low done on consecutive nights on the 5th and 6th with marks of 57.4º and 56.3º respectively the latter was the warmest morning low for the month and the only morning under 40º with a reading of 38.7º on the 12th. 

God didn't;t turn on the water spigot till the last week of the month and we got all of the month's rain in a 9 day period from the 22nd to the 31st with a sum total of 3.78 inches which is almost a normal October month of rain. All in the last 9 days. 1.1 inches on Halloween capped it off. 5 days over a 1/4 inch and 3 days over a 1/2 inch or rain. 

The temperature average for the month was L 49.73º and H 69.83º more than +4º overnight and nearly +8º by day. Crazy.

This week has a very seasonable forecast with snow levels dropping down to the lower foothills later in the week then rebounding back above pass levels but not a single warm day in the outlook. We will likely get out first frost of the year this week and highs will remain in the 40s most of the week. Now that's November :) 

Soak it up my friends, soak it up.