Why are those who want to sell and buy hesitating to list?
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Anthony: Why are so many sellers hesitating to list? Well, in the winter, keep in mind, it was because they were thinking, “Where am I going to go? There’s not enough inventory.” Right now there is still an aspect of that, but inventory’s lifting. It’s just not anywhere near any historic norms. It’s historically low still, even though it’s increasing, even though buyer demand has backed off a little bit. Anthony Lamacchia here with Crush It in Real Estate. I want to talk about this for a couple minutes because this is a hot topic right now, the amount of sellers that are just sitting around. Put yourself in a sell/buys shoes, someone who’s selling and buying.
Not just a sell. Not just, “I’m selling. I’m moving out of state. I’m selling. I’m going to rent somewhere and live the rest of my life.” Sell/buys. It got more expensive for them on both ends literally and they’re just realizing that. Realtors that know what they’re doing are going on listing appointments right now saying to sellers, “Mr. Seller, here’s the comparative properties in the area. This is what they’ve sold for, but things have changed since these properties went under agreement. Back in February when that one went under contract, and back in January when that one went under contract, and back in late February when that house went under contract, there was three houses for sale in town.
“Right now there’s 25, so inventory is up like 9 times, 8 times the amount. That creates more competition for you, Mr. Seller. That’s one reason we can’t be quite as aggressive with the price as this comp makes us think maybe we can. The other reason is interest rates are now 6% and at that time they were 3.5%. That’s a difference of 2.5%. That takes someone’s affordability and substantially decreases it. Back then $600,000 house, 3.5% mortgage.” I’m making up numbers, but I don’t have a sheet in front of me. “Mortgage payment was $2,100 a month with 20% down. Now Mr. Seller, it’s $3,800 a month. That’s a massive difference because these buyers don’t have as much money.”
Literally, sell/buys are getting stung on both ends. They’re feeling like, “Wait a second. Yes, I was dying to move. Great to see there’s a few more choices, but now I have to spend more money out of pocket, and you’re telling me I can’t get as much from my home as I could have four months ago?” “Yes. You can’t.” Really, let’s be honest. A seller right now is not going to sell for as much as they would have had they listed in late January, February, early March. They’re not. Us realtors tell sellers– I’ve been telling sellers for 12 years– I started going on the news 12 years ago, talking about the market, which by the way, I have a live segment tomorrow morning for Boston friends on Fox 25 at 9:45 AM, talking about the market.
We’ve all been telling sellers for years to list in the winter. That’s how you make the most money. Very few listen. This year, it proved to be true more than ever. It’s always been true. Be aware of that. Remember what I’ve been talking about. In this type of market, you have to be totally aware of the reasons that buyers and sellers are behaving the way they are. This is a classic scenario of, “It’s clear we’re in for a housing slowdown. We’re in for an economic slowdown.” Stock market today went down 700 points. People freaking out. We’ve seen some buyers bail out of deals.
If you’re buying a home to live in long-term, why in God’s name would you bail out? I remember when that happened at the beginning of COVID. Very beginning of COVID, there were buyers bailing out of deals and I literally said live on our company Facebook, I said, “Those that are doing that are going to regret it.” They regretted it. Prices went up 35% since then. Here’s the deal, folks. Even if we did see some price correction, let’s say, God forbid, we saw a 10% correction in the next year or two. When we look back over a 4-year span, prices went up 25%. Come on, folks. You’ve got to keep this stuff in mind and you need to be able to articulate that to your buyers and explain it.
See, now being an expert matters. We spent two years with– If you’re working for sellers, working with sellers, you were spoiled. When you were working with buyers, it was very difficult to get an offer accepted, but it was easy to have a motivated buyer because everybody was pouring in to buy homes. Everybody. Now we’re in a different market. As I always say, when you educate, you attract. You need to learn the facts, learn what’s going on, learn the why behind the behaviors out of the buyers and sellers, like I just explained to you with sell/buys. Be aware of those things so that you can understand how they’re feeling. You can understand how they feel from where they’re sitting and explain it to them.
Now, you can talk to them about the fact that, “Hey, Mr. Seller, I know you can’t get quite as much for your home as we saw this quick blip on the radar this early spring, but it isn’t like prices have fallen out, so you shouldn’t be aggravated about it. The home that you buy much less likely to have multiple offers. Now, Mr. Seller, it depends where you’re buying. Multiple offers still exist. We’re still seeing multiple offers situations, but it is decreasing, which it normally does seasonally as we get closer to summer, but it’s decreasing a bit faster because of the interest rate increase.”
Think all those things through, be aware of why a sell/buy would behave that way, and keep tuning in, folks. I’m going to be doing more videos for you. We’re going to be talking about the market more. I’m debating right now. I might do a full market update Saturday morning. I haven’t decided, or I might wait till later next week, or the week after. We’ll see. I want to see what happens with rates. I want to see what happens with markets, et cetera. All right, folks. Hope you’re doing well. Happy home selling. Have a good night.