Happy eclipse day!
This post is to give you a clear picture of what is happening in the real estate market. I want you to have all of the information so that you can make an informed decision about getting your home sold, or waiting it out.
Feel free to call Me on MY private cell at: 916-223-6688 if you would like to discuss, or you can also email me at firstname.lastname@example.org
Gary Keller, founder of Keller Williams, has been alerting us to prepare for the shift in the housing market for the last few years. Based on what has happened historically, for decades, we are overdue for prices to level and fall.
The shift in the market is clearly happening around the country. Sacramento and the surrounding area is not immune.
Here’s what happened over the weekend, in the Sacramento market
My Transaction Coordinator had to amend three contracts (homes already under contract for many weeks) over the weekend, as the homes did not appraise. This has been happening for the last few months, usually at the higher price points. More concerning is that they are at the lower price points, which had been remaining steady. My new CPO (Certified Previously Owned) program will do as much as we can to prevent that from happening.
Here are the price reductions on homes (3 weeks into being under contract) over the last weekend, due to them not appraising. Remember, buyers can choose to walk at this point, as they sometimes do. About one third of contracts dropout on average, mainly due to appraisals and inspections. The contracts are lenient to sellers, hence us using our CPO program, which gives our sellers more protection.
With CPO in place, this fallout drops dramatically. The one seller this represents was not CPO.
1.(Buyer) $225,000 appraised at $219,000
2.(Buyer) $250,000 appraised at $227,000
3.(Listing) $255,000 appraised at $240,000
Most striking, these were all in the lower price points, which – up until now – have remained steady. The shift in prices starts at the higher price points, sometimes seen reflected in ‘days on market’ – these increase as buyers are not willing to pay the higher prices. Once it starts happening in the lower price points, the price points that are the ‘average buyer price’ around the nation – $180,000- $275,000 – it’s a clear indicator that the shift is happening.
A few scenarios to consider:
●Sit out the cycle and wait for 7-10 years for prices to return – not guaranteed, however based on historical data, this is the likely timeframe. This would put us at 2024 – 2027 when prices return to the ‘height’.
●Call me and let’s get your home on the market now.
●Drop the price now, and get it sold. We are just cresting the peak (see the diagram), therefore still suffering low inventory for buyers. If it is priced right, it will likely sell.
●Make sure that CPO is completed in full on your home. This allows your home to get ‘ahead of the pack’
●Consider renting out your home.
●Offer seller financing if you are able, and if your home is paid off or your mortgage company allows it.
This is not meant to be scare-mongering, merely as a way to give you a rounded view of the market. Please call me at your earliest convenience to discuss a strategy that will allow you to move on to your next chapter.