This past Friday night, my Keuka Lake Facebook feed was blowing up as excited residents posted about the spectacular meteor that, seemingly, soared over the lake before crashing somewhere in the region. One woman spoke of the bright intensity. Another described viewing it for an instant before the brilliance went dead. Although I didn’t enjoy the privilege of seeing the fireball’s brief moment of glory, my mind immediately raced to business because, of course, our extraterrestrial visitor serves as a great metaphor for the state of the current real estate market. Right?
The “market-that-was” doesn’t really need much in the way of further description. As we all know, the spring of 2021 was unprecedented. Perhaps a once in a lifetime occurrence. Both national and local news feeds were reporting the fact that property values had increased an astonishing 18.8% in the preceding twelve months. Back in the spring I had patted myself on the back for having successfully predicted that this market was going to slow down once Memorial Day came around. However, I then confidently forecasted that exhausted buyers would re-enter the market in the fall- ready to resume the hunt that they had abandoned over the summer. Wrong! Lesson learned- too much self-congratulatory backslapping ultimately leads to a torn rotator cuff and, then, surgery. Seriously.
Because of my surgery, I haven’t been posting for the past six weeks so let me catch you up to speed. Let’s start with sellers. Traditionally, the month of September sees a significant uptick in the number of properties coming on the market for sale as homeowners settle into cooler, shorter days. That hasn’t happened this year. Currently, there are only 938 homes on the market for sale in the six-county region. In Monroe County, there are only 528 properties available. Given that there are twenty municipalities in the county, a few keystrokes on my Texas Instrument Ti-30 reveals that each town has, on average, only 25-30 homes available for sale. That’s. Just. Astonishing.
If this past spring was an accurate indicator, it would mean that such low inventory would translate into a market in which homeowners were selling immediately and for valuations tens of thousands of dollars above list price. However, that’s not happening and the reason has to do with the fact that the armies of anxious buyers who engaged in bidding wars six months ago have simply not re-engaged. Frankly, it’s puzzling. On May 14th, there were hundreds of would-be-homeowners vying to purchase a new home. It made sense that they set aside their search and spent the summer enjoying the sun’s rays. Why they haven’t re-entered the market now that autumn leaves are turning shades of crimson is perplexing. Perhaps it has to do with buyer fatigue. Maybe fear of COVID is causing some hesitancy. Whatever the reasons, the results are the same-
- The number of showings on homes available for sale have significantly diminished
- The number of offers tendered has decreased
- Some homes are selling slightly over asking, or even below list price
- Delayed negotiations are becoming an increasing rarity
There are exceptions to this downturn, and they all have to do with some of the very basic tenets of real estate- location, condition, and price.
- Location– There’s still high demand for property located in a great school district. As a result, better districts continue to command the greatest interest. The only exception to this rule is the Southeast quadrant of the city. Empty-nesters, first-time buyers, those interested in living in an owner-occupied rental property- these are some of the many demographics who continue to have an interest in living within walking distance of a great restaurant or cultural amenity.
- Condition– Six months ago, so long as it had a roof and four walls, a residence sold with a dozen or more offers. Today, it’s back to basics. Remove wallpaper, replace carpets, and paint out rooms where necessary.
- Price– There’s a great deal of expertise- and artistry- needed in today’s market. A list price needs to be low enough to encourage the possibility of securing more than one offer, however, if it’s too low and a bidding war is not created, you don’t want to have listed at a price that results in money being left on the table. An established and savvy agent should be able to help sellers navigate these parameters.
In short, the meteoric market conditions that resulted in the chaos and excitement of this past spring have lost their luster. However, there are many comets traveling throughout the solar system, and they all make return visits. Although I don’t foresee an immediate return to anything as remarkable as that which we enjoyed earlier this year, there are still hundreds- if not thousands- of buyers who I believe will re-engage. When they do, probably sometime shortly after the start of the new year, we’ll enjoy another great astronomical show although one that probably won’t be as brilliant as the Haley’s Real Estate Comet that captivated us this past year.
If you have questions or concerns about real estate, feel free to call me at 330-8750. Thanks!