If the past two years have taught us anything, it's to expect the unexpected - especially when it comes to the real estate market. With rising interest rates, soaring inflation, significant global events, continued inventory shortages and shifting seller and buyer expectations, even seasoned property veterans can't rely on previously foolproof real estate tactics to come out on top.
With so much in flux, what "new rules" should buyers and sellers consider before entering the real estate market? Much can be learned from recent successful strategies around pricing, financing and offer contingencies.
Because each market is different, we reached out to Berkshire Hathaway HomeServices' network leaders from across the glob for insights on how they're guiding their own clients during this unprecedented period. Whether you're a first time homebuyer or a seller about to list your home, I hope this information gives you the necessary tools to achieve your real estate goals.
All my best,
Christy Budnick (CEO, Berkshire Hathaway HomeServices)
THE NEW RULES IN REAL ESTATE
In a "unicorn" market, lessons learned from the past transactions often no longer hold true.
Even if you're already firmly planted on the property ladder, market shifts, rising interest rates and inventory shortages are reshaping the realities of real estate. Rules that may have been a given even five years ago may do little to help you secure your next home-or get top dollar for your current property.
So what should real estate novices and veterans keep in mind when navigating this market? We sat down with top network leaders from across Berkshire Hathaway HomeServices' global ecosystem to understand real estate's new normal and how informed strategies and tactics can help you achieve your housing goals.
Q: Are multiple offers for properties still the norm in Eagle County or are things shifting?
The multiple offers (bidding wars) of 2021 and early 2022 have largely subsided in Eagle County. A combination of factors, including rising interest rates, sellers being too aggressive with their pricing and more inventory to the market have changed how buyers are approaching their purchase. A special property with unique qualities, location or finishes may very-well garner multiple offers, however, right now buyers are able to negotiate with sellers with success. Sellers are reducing their asking prices - in fact over 25% of active sellers have reduced their price so the market is becoming more balanced and the list price to sale price ratio is under 100% for the first time since December 2021. Sellers are also accepting more financing contingencies and typical due diligence (inspections, appraisals, etc.) in order to make buyers comfortable with the purchase. This trend should continue through the balance of 2022.
Q: Inventory is rising, what does that mean for sellers in the market?
The good news for sellers is that selling a home and finding a replacement property is once again a practical move. Inventory in Eagle County has increased over 30% from this time last year, giving sellers more options for a replacement home when they sell. Yes, more inventory can put pressure on prices, but it also brings out more buyers to look at properties and for sellers, this should be seen as good news for the market. The average sale price is increasing because of the lower than average inventory but not at the speed or to the degree of the last 18-months. All-in-all the market is healthier than a year ago and with heightened demand and more choices, should be good for our summer selling season.
The statistics presented are compiled based on figures and data generated by IDC Global and Datafloat for the benefit of BHHS Colorado Properties. Due to possible reporting inconsistencies, Days on Market (DOM), average prices and rates of appreciation should be used to analyze trends only. Due to MLS reporting methods and allowable reporting policy, this data is only informational and may not be completely accurate. Data maintained by the MLS' may not reflect all real estate activity in the market. All information should be independently reviewed and verified for accuracy.