Some are calling it a correction, others a slowdown, but one thing is certain is certain metros — buyers are getting a much needed respite.
While this is largely relative as prices in the major metros have jumped significantly since the crash, several key metrics have swung back in the favor of buyers.
- The Number of Homes reducing their price is up.
- The Sale Price over List Price % is dropping.
- PPSF increases have declined significantly.
These key factors is amidst a backdrop of limited supply, rising interest rates and more realistic pricing from sellers and a 2.4% decline in the number of homes sold in 2018 vs this time last year.
So if it’s a comparatively good time for buyers, what should prospective buyers do? Are there any strategies they can use the make the most of a good situation.
For starters they should work with an agent who is very experienced in the area and can identify all the opportunities, both on-market and off-market. For the traditional or “on-market” segment of the industry buyers should know several things. Properties built during the last cycle i.e Mediterraneans built in the decade before the housing crash are no longer the style of the moment and can be purchased at comparative bargains. Secondly, there is a mini-wave of spec homes built during the initial stage of the recovery that are now trading for the first time. Buyers, and their agents should always be aware of how much the previous owner bought their home for as it’s a possible indicator of their motive for selling. For instance if you know a seller bought their “spec” home in 2013 and are selling their home now in 2018, they are likely looking to cash out and even an offer significantly below asking price would still be balance positive for the seller.
Of course, this is a broad generalization and certain areas are still experiencing seller’s market conditions i.e Akron OH, Richmond VA, Greensboro NC, and Buffalo NY.
Now if you are a buyer’s agent, what can you do to take advantage of this context? One answer is to submit moderately under-asking offers but with good terms will be much more likely to be accepted. Another is to use the increasing amount of tools at agents disposals. The large, public online listing platforms display how many price reductions a property has been subjected to, so even if your buyer has never seen that property before, but you know it’s seen 5 price chops in the past 2 years, that there’s “blood in the water”.
It takes a bit more effort on the agent’s part, but review the homes that have expired from the active market but not sold in the past year, identify the potential “matches” and send to your clients to see if any of them are of interest. If any are, reaching out to the former listing agent is a good way to provide additional value to your clients and possible secure a property for less than what is was previously listed for.
Another tool buyers agents can use to maximize the window of opportunity is to use PLUS, which gives buyers agents access to hundreds of off-market sellers. Not only will you be impressing your clients with potential homes to purchase that your competition will not have access to, but many of these homes priced slightly under FMV since the owners are opting to not sell the traditional route on the active market and are hoping to sell discreetly off-market.
Right now, agents can access the platform by signing up here — http://agents.pickplus.com/#/signup
For this first month access is free and agents need to only hit 1 of 3 criteria for access.
If you are an agent and you’re reading this, you already know that timing is everything so start impressing your clients today!