3 Facts of the "New Normal" in Bay Area Real Estate
1: This is a high-stress market and it will continue
Buying or selling a home is usually prompted by a life event: death, divorce, marriage, relocation, job change and increase or decrease in family. These life events often bring stress and buying or selling a house adds to this stress. Add in the drama of a notably contentious presidential campaign, toss in the uncertainty of the financial markets and then add the pressure of the fast-paced expensive Bay Area market where decisions and offers need to be made quickly.
Unfortunately, all this is here to stay for a while. Yes, any normal person would be hard-pressed not to feel like they were in a tornado.
2: Low inventory of good homes will continue to drive pricing. However, buyer demand is becoming tempered and more deliberate
Yet another reminder that markets invariably change. While our group of top agents acknowledged the low inventory, they also recognized that buyers were becoming much more selective and deliberate. They look, they think and if they don't "feel it" they move on. "Who cares if there is an offer date?" "Another day and another home will appear." "Maybe the home won't sell and we can buy it for less." If they don't see the value they pass.
As a client of mine once said during a previous hot market, "This market is so crazy even a burning house will sell." Not so any more. Many agents believe sellers are seeing the last days when homes with deficiencies will sell quickly for top dollar. Great homes in great locations, priced fairly and marketed properly are selling. However, we are now beginning to see situations where even these homes only have one offer and sometimes, unfortunately, none.
3: Now more than ever you must play to win
While we don't believe another downturn is on the horizon, having a Realtor with strategies to address even the slightest of market corrections is critical to success whether you are a buyer or seller. A San Francisco agent in our group told a story of a home with 12 disclosure packets out to potential buyers. When the offer date came his buyer did not make an offer. What happened? The buyer thought the home would sell outside his price range. Sadly for him, the home sold below what he was prepared to spend. The moral to the story is "nothing ventured nothing gained." We are entering into a shifting market. Don't be afraid to make an offer.
Finally: The bottom line is we are moving to a ‘new normal’
The "feet on the street" believe that the outlook for the rest of the year remains positive, but moderating, with a continuing but more purposeful demand for Bay area housing.