The Wind at Our Backs
J Philip Faranda April 17, 2013
It has been weeks since I last updated this blog, and it isn't writers block, indifference, or slow news days. I am busy.
I don't mean active, or experiencing the typical cyclical upswing of the spring season.
I am busy. Really busy.
I started the firm in late 2005, and it took me 9 months to prime the pump with any significant number of clients. By mid 2006, I had clientele for sure, but the market was then going through what was then referred to as a "soft landing." A year later, the sub prime crisis hit. The year after that, Wall Street's sinkhole almost brought on a barter economy. I have never really participated in any exuberance, rational or otherwise, as a broker.
I am in the midst of multiple bids on three listings as I type, several quick accepted offers on others, and inventory has shrunk to a level so low it is almost absurd. Consumer confidence has come roaring back, and I am seeing buyers drop inspection contingencies, mortgage contingencies, and doing as much as they can to get their offer accepted ahead of the competition.
There was a time when I would go over market activity with sellers to price out their home and the MLS would have a very long list of active, unsold properties and an all to short list of sold properties. That ratio has now flipped: there are as many sales as there are available properties, and in some case fewer available homes than the closed properties. Buyers have fewer options, and it is making them act. The leverage that buyers could exert just a short year ago has all but evaporated, and sellers have regained leverage with a vengeance.
I recall 2007 when banks severely curtailed their underwriting guidelines to minimize risk and remarking how quickly the pendulum had swung to the disadvantage of home sellers back then.
How quickly the pendulum has swung back.
This is not to say that overpriced homes will sell or that happy days are here again for good. Overpriced homes still get stale. But homes priced right, instead of inexplicably sitting lonely and unsold in the lean years of 2008-2011, are now selling briskly to eager buyers with some robust competition. Buyers no longer possess the leverage to hold the seller over a barrel anymore. Balance is back. Values have stabilized and in some cases, gained strength.
I have not had the time to post market stats locally, but I will soon. My observations are that of a guy out in the field, watching this all firsthand. It is a sight to behold. It isn't "easier" for a variety of reasons, not the least of which is the return of neophyte agents who don't know their job too well and the accompanying headaches, the consumption of time to handle multiple agents regarding the same property, and the endless work of quality control on higher volume. But consumer demand is back, sellers can sleep better at night now, and we no longer risk giving away the farm- literally- to consummate a sale. I am almost ready to say the R(ecovery)-word.
As I stated to a seller client who wondered aloud if we had under priced their home after a huge bidding war on their property, we are witnessing the transition to a new market where, finally, the wind is at our backs.