October brings thoughts of “ghoulies and ghosties, and long-leggedy beasties, and things that go bump in the night.” Real estate has its own array of creatures and crawlies.
Some buyers are still frozen in enchantment by alluring spells:
- Waiting for lower interest rates: that spell was broken 6 months ago
- Prices will come down again: that one hasn’t worked since early 2012
The fall market still sees some familiar spirits hovering around the most desirable, fully-updated properties. There are we still seeing fiercely competitive multiple offers, including some all-cash, and even a few high-risk, non-contingent offers.
The post-Labor Day market has brought some new demons and scariness for sellers that we haven’t seen for almost two years. As a significant increase in inventory appeared we’ve experienced:
- Listings that receive no offers on the offer date, or ones that receive an offer or two, but that stay close to list price
- Inconsistent demand for all but the most walk-friendly neighborhoods
That last condition is especially ghoulish for some sellers who, like some of mine, purchased their replacement homes earlier this year when inventory was very low. In particular, there are many hill properties competing for buyer attention right now.
Using Berkeley as the example: there are 93 active residential properties, including condos, on the Berkeley market right now. That’s almost twice the number this time last year. More than a third have been on the market for over 30 days. That represents a significant change from the situation in the first half of this year. I’ll be reporting in more detail next month about third quarter results. But the single biggest driver of the very hot 2012 and 2013 market, namely low inventory, has changed, and quite quickly.
We are beginning to encounter some buyer pushback in the form of classic remorse, doubt, and delay. Buyers still don’t run this market, but this is a time for those who became fatigued by competition to give the buying process another chance as we start to see more balance.
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