Why? I can hear you ask. Because the market is returning to normal and more fair to everyone.
There is now way more inventory on the market and more continues to on a daily basis. After so many years of being so little inventory, this is a welcome relief for people searching for a home! Not only are buyers more likely to find a house they love but they will also have a fair chance of getting it and not being priced out.
Advantages for buyers
The market switching means for buyers there is more choice. It also means they are more likely to be able to negotiate price, and less likely to be in competition with other buyers and not having to compete in multiple offers. It also means that buyers are not rushed into making fast decisions or making compromises without being able to take the time to consider carefully.
Why you should buy now!
If you want to buy a home, the sooner the better! This is because your purchasing power is at the highest right now, but it could go down at any time due to rising interest rates.
Higher interest rates
We have had historically low interest rates for the previous 5 years, but this year the rates went up and the Fed has indicated there will be up to three more hikes in 2019! This will reduce buying power considerably. Only ½% raise in interest rate reduces buying power by 5% .
The market switching, what about sellers?
The last 5 years sellers have had the definite advantage. With so little inventory this has meant it has been a sellers market, buyers clamoring to buy the same house which pushed the they can push the prices up even more have overpriced their homes and many are sitting there not selling.
It is still a good time to sell
It is still a good time to sell because prices are the highest they have ever been! If you sell now you will likely be realizing a huge profit. No one knows what selling prices will be in a year, or even six months from now, but we know they are high now. If you want to sell, you need to price your home very carefully, if it is overpriced it will just sit there, you wont get many viewings and you will waste time and energy. Once a home has been on the market a while, buyers think there is something wrong with it and devalues the house even more. Finally the seller has to do a price reduction anyway. Remember the longer it is on the market the lower the final sales price. The number of price reductions have increased considerably in the last couple of months all over Los Angeles. https://la.curbed.com/2018/10/12/17965662/home-prices-listing-reductions-market
Do not overprice your home!
A smart seller should price just below market value, buyers are more and more educated, they know a good deal when they see one. If priced well, a home will still sell fast, and will still get more than one offer, there are plenty of well qualified buyers out there eager to buy and take advantage of the reasonable interest rates, however, they are not prepared to over pay. And as I keep repeating, more than one offer creates multiple offers, which pushes the purchase price up.
Yes, the market has switched, and it’s a good thing, it’s now a normal market where neither buyer or seller have a huge advantage and negotiations are more reasonable.
To contact me for any questions-
Ten tips to WIN multiple offers when buying a property.
October 2018. Make your offer so strong the seller picks you, even when there are several offers that could in theory be “better” than yours.
Direct line 310-508-5979
Coldwell Banker Residential Brokerage
166 N Canon Drive
Beverly Hills Ca 90210