Over the past few months, we have seen an increase of homes on the market in Redondo Beach. Properties are sitting for a longer amount of time. There aren't as many buyers clamoring over listings, creating bidding wars. And sellers are accepting offers that a year ago they wouldn't have looked twice at, including contingent offers. All of these factors reflect the slow down that has been expected and seemed imminent, and quite frankly inevitable.
Increased Housing Inventory - What does It Mean?
There is definitely a change in the air. Buyers are having an attitude adjustment. They aren't exhibiting the anxiety that was the driving force behind the real estate market these last five years. Now, they seem to be taking their time and are not rushing to make an offer on a property the minute they see it.
This all seems to indicate that we are on a "turn" in the market. We're shifting from a seller's market to supposedly a balanced market where neither buyer or seller has the upper hand. Last go round, we skipped the balanced market altogether. We went from the buyer's market (2010 - 2012) right into a seller's market. This time I think it will be a slower transition.
Rising interest rates will also contribute to this market slowdown. Buyers may take pause as they adjust to new rates. If the rates climb high enough, it should put downward pressure on pricing as well which should ultimately propel housing inventory even higher.
What does this mean for Buyers and Sellers?
As housing inventory increases and the market becomes more challenging for sellers, it is more crucial than ever that sellers properly prepare their homes for sale. Curb appeal and the emotional reaction from buyers is more important than ever if you don't want your home to grow stale on the market collecting dust, not offers. Some staging may be necessary. Professional photos are more important than ever. A smart pricing strategy is important in any market, but again more than ever you want to be smart about your marketing strategy. On the other hand, buyers can finally take a deep breath and possibly take back some of the power. They could find themselves in the driver's seat if properties start to languish on the market.
If this is a true balanced market, then there will be more negotiating and more concessions. Buyers won't have to go above and beyond to get a deal done, but sellers will still get a fair price for their homes. I will continue to monitor the market and keep you apprised of any more changes in housing inventory and the health of the market.