Our two-year-old white-hot market had to correct at some point, says TeamUp Seattle Managing Broker, Michael Ackerman. And while it's still a seller's market, there may finally be some opportunities for buyers.
The cooling real estate market seems to have created a "flood of inventory" for buyers. At the same time, the rise in interest rates has bumped some of those buyers in the under $750K range out of the market. Qualifying for large mortgages is tough for all buyers, but properties in the $1M plus range are still selling, despite having slowed down recently.
Reasonably priced, well represented and staged properties, says Ackerman, may still see multiple offers. But the days of bidding wars and two-day sales for over the asking price may be in the rear-view mirror. With sellers having to adjust their strategies, buyers might be able to get into desirable properties for the asking price while interest rates are still at a relatively low at around 5%.
"We need to work with sellers – and to a certain extent also buyers - to help them adjust their expectations. There's been a palpable shift in the last month; everyone seems to be taking a collective breath. In our locally strong economy, the market it still active. Though the January 6 hearings, the war in Ukraine, and stock market fluctuations are affecting the luxury market most dramatically with an 18% drop from last year.
Ackerman adds there's still plenty of business to go around. Market variabilities are a "psychological head game," and managing that requires flexibility. Ackerman advises brokers to "stay buoyant and remain hopeful." The truth is a balanced real estate market creates more win-win situations. He adds that the cooling market requires a bit more creativity. "Hone your negotiating skills," he says. "It's time to look at creative financing contingencies, being more aggressive about open houses and spending more quality time and energy on each listing. Make sure your systems are in good shape and that you can 'do it right the first time' every chance you get."
Interest rates may still go higher, so it makes sense to remind buyers this could be a good time for them. "Be passionate about helping clients through this important life event. Be honest, flexible and realistic as you set expectations for buyers and sellers. How can you fit into their life story?" he asks, "How can you serve it best?"
The white-hot market was unsustainable. Knowledge is power, says Ackerman. Make sure you know all you need to know about today's fluctuating market and set realistic expectations for your clients, your colleagues and yourself.