Despite news of a recession looming, Realtors remain optimistic about today's housing market. Increased demand due to lower interest rates and inventory levels well above 2018 levels are good for the housing market, they say. Additionally, more sellers are willing to take less than asking, which is a sign that the market may be shifting more power from sellers to buyers. These and other indicators lead Realtors to believe the market will get another wind of activity after the Labor Day holiday.
According to an MLSListings Inc. data report, the percent of list price received fell year-over-year in four out of the five MLSListings counties in July, and was flat in Monterey. Only Santa Clara (101%) and San Mateo (105%) counties showed an average above 100 percent. In all other counties the average was below 100 percent. The report states this could signal that more negotiating power is moving to the hands of buyers.
"Lower mortgage rates are helping soften the expenses of buying a higher priced home.
Taking on additional debt is more affordable for buyers and this has brought more buyers back to the market," says Alan Barbic, president of the Silicon Valley Association of Realtors and a broker associate with Sereno Group in Los Gatos. "I'm hearing from agents that there are now many sellers getting ready to put their homes on the market so they can take advantage of the renewed interest from buyers."
"It is very difficult to get help from stagers or painters right now. Stagers are booked three to four weeks out," according to Joanne Fraser, a Realtor with Compass in Los Altos. "This means sellers are preparing to get their homes on the market."
"This is a unique kind of market where it is a good time to buy and it is a good time to sell.
I anticipate more activity after Labor Day," adds Barbic.
Should buying activity increase, Barbic strongly cautions buyers not to be caught in the frenzy and overbuy. "Homeownership is a long-term investment, so buyers need to be prudent about their finances. They should first find out how much home they can afford. Get a letter of pre- approval from their lender before starting their home search, make a list of their home needs, then seek an experienced Realtor who is familiar with the neighborhood where they want to live, and then together search for homes that fit their needs and price range."
Barbic says with more inventory expected and lower mortgage rates, the net profit for sellers to move on will be smaller than in the past. They will still need to sell their current home first. "If sellers are serious about selling their home, they need to be realistic and objective about pricing their home according to the current market environment."
"A professional Realtor can be objective about setting the correct price for their home. This is based on location, overall appeal, condition, amenities and similar currently listed and recently sold properties," says Barbic.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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