I’ve spent the past three months catching up and really understanding the local property market. Every Sunday, I draw a three mile loop of five open houses to bike or jog to. Might as well get a workout in as well right?
At each open house, I take notes and pictures on interior design, get an idea of price, listing duration, and ask why the owner is selling. I even tested the waters myself for 25 days on the Multiple Listing Service to see if I could lure someone to pay me higher than what I believe is current market.
The main things I learned about the current real estate market are:
1) Inventory is down about 40%-50% Year Over Year. Realtors and buyers are starving for inventory.
2) The majority who are selling are going through a divorce, a trust sale, or “need” a larger space due to a new addition to the family.
3) There is little sense of urgency to sell as sellers are happy to pull their listings off the market if they do not get the price they want. There was no sense of urgency for buyers to buy for for the past five years as well, however, that is changing now that rents are starting to rise and inventory is declining.
4) Realtors will agree with anything you say if it means a potential transaction. I decided to be bearish with five real estate agents and bullish with five other real estate agents to see what their responses would be. When I was bearish and mentioned that I was thinking about selling my home, all five agreed that now is the right time to sell. When I was bullish and mentioned that I should be buying rental properties given low rates and high rents, all five agreed that now is the right time to buy! Try the experiment sometime. You will be astounded by how much they resemble sheep.
5) The agents have all said the sellers have either bought another property or will be buying another property. Not once did the Realtor say their client was selling to rent. I think I can understand the psychology behind this phenomenon because as a homeowner, I don’t ever plan to rent my primary residence. Perhaps it’s because we get accustomed to the mortgage interest and property tax write-offs. I get the feeling many also feel the sense of defeat if they go from owning to renting, not that renting is bad, just a return to when we didn’t have enough money to own.
HOMEOWNERS NEED TO CONTINUE GOING ON STRIKE Read more…