There have been times in the past when it was clear who ran the market. In fact, not too long ago during the real estate market crash, buyers were certainly running the show. They could essentially dictate the terms of their purchase simply because sellers just couldn’t sell. Luckily (for sellers), the housing market has been on the rise over the past few years and this has created a shift in the "control".
The Rise in the Market
When property values began to rise and interest rates began to drop in the wake of the market crash, buyers were definitely ready to get back in the game. The problem was, they all came out of the woodwork at the same time. So much so in 2013, that open houses felt like Black Friday sales, with buyers pushing and shoving their way to the top of the list; and in doing so, creating massive bidding wars over homes. Last year, I sold a property in Norwalk, CA that received over 30 offers within a week of listing it. It’s safe to say, sellers had the upper-hand in that market.
The frenzy to buy homes was rather short lived. Home prices and interest rates have both gone up, giving some buyers pause. Not to worry, if you’re considering selling your home there are still a ton of buyers out there. You just might not have as big of a bidding war. And buyer’s might have a longer list of demands (fix this, leave the fridge, etc.)
So, Who Is in Control?
With so many fluctuations in the market, one might wonder, does the buyer wear the pants or the seller? Last year, the answer was easy, sellers were sitting pretty in designer jeans. This year, I’d have to say both have one leg in and one leg out. Or, you can think of it as a 3-legged race.
In my opinion, this is the ideal market; everyone is out to play. If sellers hold out and wait to sell, buyers have less options, causing bidding wars and superficial home values. If buyers hold out and wait to buy, houses sit on the market and lose value. Therefore, everyone should be happy with the current conditions. Let’s just hope the winds don’t shift anytime soon.