Ever hear the slogan “Ripley’s Believe It or Not??” Well, “Housing Believe It or Not” is the order of the day.
Feel confused? Worried about the looming economy? Some banks which are a staple of our economic barometers are on the rocks? Inflation rates increasing? Prices escalating?
You know what I am referring to. Even doing something as mundane as shopping in the supermarket, you get a pinch of what I am getting at. Yet, ironically, as a realtor, I currently witness the reality of a tsunami of real estate ongoing interest with fierce competitive offers lining up to survive in today’s market.
Would you “believe” the scenario? A house comes on the market, gets multi-offers and is off the market within five days. Home buyers, home sellers and active realtors who trek out on Sunday-designated open house day are aware of the market conditions warranting stiff competition. In contrast to previous markets, prices of listings were scrutinized and determined carefully with the realtor to elicit good responses of offers. Today, whether the selling price is at value or below, the offers that come reflect a competitive drive whereby buyers are coming in strong over the asking price. In the midst of a sellers market, owners are still in a position to dictate conditions and many times suggest waiving both the inspection and mortgage contingency to be the chosen winning bid within the pool of buyers.
Here’s a recent example. I was thrilled for my qualified buyer who came in over asking for a particular home they desired with all cash terms, which is the gold standard for offers. The house was listed on Thursday and the highest and best was chosen on the following Tuesday deadline. My buyer with the all cash offer only came in second since there was another higher offer over his offer and the market keeps telling its own story.
My sorry response was, “We’ll just have to keep looking,” while encouraging that his terms of all cash are excellent, and carry no financial risk for the seller and will be sought after on the next house of interest that comes on the market.
The hovering cloud, however, is still lurking and many buyers and sellers continue to express concern where the market is heading. Nationally, pending sales did rise 2.5% while sales of existing homes fell 1.5%, according to the National Association of Realtors. Demand for housing does persist as in the aforementioned scenario, yet higher mortgage interest rates have cut into housing affordability. The facts are out there and the monthly snapshot in the NJMLS statistics report indicates that total home sales are down 17.8% last year compared to 2021. A one-year change in closed sales of all properties are down by 38.5%, reflecting lower inventory, with a one-year change in homes for sale of all properties reduced by 28.7%. Single family median sales price did decrease 0.9 % to $520,000, with a decrease of prices across the board, including townhouse-condo median sales down 1.4 % to $377,000, and adult communities median sales down 5.0 % to $345,000.
Although some home prices remain high, mortgage rates which have been recently volatile and threatening, did decline steadily through January sparking a recent surge in mortgage demand. Lower rates should aid in affordability because your buying power is higher and may soon lead to a steadier uptick in market activity by the hot spring selling season. And, remember, refinancing when rates do decline in the future is always an option to the homeowner down the road.
Confused yet? Maybe so, but my motto is that when timing is right for you and your finances allow for it, take the plunge. It could be better or worse? No one has a crystal ball and when you are determined to sell or buy, go for it! Home is where your heart is, so it is one of the most important investments you’ll make and timing of need is the driving factor mixed in with all the variables.
Kudos to Moshe Kinderlehrer, who over a decade has published “all the news that it is fit to print,” including the changes of real estate fluctuations. May we all continue to watch the market while recognizing its cycles through our renowned local Jewish newspaper. Mazel tov to Moshe, Jennifer and the entire staff for 10 years of a job well done! And, as they say, to be continued...
By Ruby Kaplan