A new normal: The shift toward a buyer’s market
Over the past two years, the real estate market has heavily favored sellers over buyers. Listing agents found themselves in the midst of an anomaly as it quickly became the new normal to receive more than 20 offers on a home within hours of it hitting the Multiple Listing Service.
Buyers were faced with wait lists and bidding wars, leaving many with no choice but to go to extreme lengths to keep offers competitive, including waiving appraisals, inspections, cash offers and offers substantially over asking price. While such a market was convenient for those selling their homes, those looking to buy were hoping for a light at the end of the tunnel. And at long last, it seems that light is near.
As we approach a post-pandemic market, interest rates have resurfaced around the 2019 national average, which was the 15-year average before 2020, median sale prices have continuously decreased since June and inventory has tripled over the last three months. Such shifts are defining factors of the market re-balancing and giving buyers some power back.
During the first week of August, mortgage rates dropped below 5 percent for the first time since April. Although the 0.31 percent decrease is still up from last year’s record-low rates, it is still a sign we are headed toward a more buyer-friendly market.
In addition to a slight decline in mortgage rates, the average home price is down $17,000 from the all-time high set in May. The Las Vegas market has about 9,800 active listings, which is more than double the amount of inventory this time last year.
With inventory set to continue climbing and prices and rates reducing, buyer activity may start to spark. As options increase, buyers can finally say goodbye to the wait lists and bidding wars, and hello to more freedom.
What does this shift toward a neutral market mean for buyers, sellers and agents?
Slow down and look around
Buyers can slow down the home buying process and look at multiple properties instead of placing an offer on the first available house. Since the market has started to cool, the pressure of competing with an overwhelming number of other buyers is no longer the main concern. More time to shop around allows the buyer to not only find the best deal, but to find the best property as well. Agents also can help their buyers by ensuring the prices are fair to today’s market by comparing the nearby comps (comparable properties).
More choices in lenders
The same goes for mortgage rates. Buyers can shop around for rates across several different lenders. When searching for a lender, it is important to not only look for a competitive rate, but also for the most trustworthy lender who shares the common goal of getting the deal done.
More homes to choose from
Increased inventory is greatly beneficial for buyers but tends to entail a lot more effort for sellers and agents to make a property stand out. If there are four properties available on one street, what makes one more appealing than the other?
Repairs and upgrades
Completing home repairs and upgrades can increase the property’s value and appeal. Now is the time to walk through the property and make those small fixes and upgrades, like painting, sealing tile cracks or smaller items that might come up during an inspection and potentially halt the deal or turn the buyer away.
Market your listing
Listing agents can also make a property stand out through in-depth marketing and staging efforts. Among a variety of real estate marketing strategies, the most basic methods are often overlooked, including photography. Photos of the home are usually the first thing buyers see, which makes it the ideal way to stand out. Staging is also a highly valuable technique to help a buyer envision themselves in the home. Decluttering the space from the seller’s personal items or removing furniture can showcase its size and potential.
Whether you are a seller, buyer or agent, a healthy neutral market is ultimately beneficial to everyone. We are heading toward pre-pandemic levels, meaning sellers are more willing to negotiate, buyers have more inventory to choose from and prices are stabilizing. If buyers have been hesitating to enter the market during the past two years, there is no better time than now to take advantage of the buyer-friendly opportunities.
Allen Zeller is a Realtor with Berkshire Hathaway HomeServices, Nevada Properties. Since his first year as a Realtor in 2017, Allen has been named a Pinnacle Sales Executive, landed among the Top 25 agents at Berkshire Hathaway Nevada Properties, been selected for the President’s Circle and is consistently ranked among the Top 10 agents in his office.