As I stood on the beautiful Tilikum Crossing Bridge yesterday recording my weekly stats update, I heard myself say, “normalize” in video version #2 and “Hang in there” in version #3. For the first time since September, something felt inherently wrong about these words to me. They lacked TRUTH.
What is the “TRUTH” of today’s market?
For years, Sellers have been the King of the Hill due to low inventory. That doubled down during COVID, as the Fed attempted to prevent an economic collapse by lowering interest rates dramatically. Buyers devoured the market with this “cheap money.” Competition became savage. Multiple offers (sometimes up to 20 or more) dominated and only the buyer who was willing to throw EVERYTHING on the table to woo a no-mercy Seller got a set of keys. That meant that the 500K home often cost them 550-650K.Buyers might have to make up a 20K appraisal gap and pay for some potentially costly necessary repairs after closing. But what the heck, money was cheap and what choice did a buyer have?
Fast-forward to today…The pendulum has swung. The guard is changing.
The Fed is once again attempting to stabilize the economy by manipulating interest rates this time in the upward direction. The buying binge came to a screeching halt in August. Price reductions ensued. Many buyers are paying list price or less, asking for seller paid concessions, negotiating seller paid repairs and are often the only offer in hand.
As I contemplated why I felt “off” using the words “normalize” and “hang in there,” the truth hit me square between the eyes. The voice of a wise teacher of mine reminded me that…
“TRUTH IS WHAT THE OPPOSITES HAVE IN COMMON”
What do these seemingly opposite markets have in common?
- Inventory remains low.
- Many sellers have substantial equity in their home due to the double-digit appreciation of the past 2 years and if they choose to sell, they will still reap the rewards.
- Buyers traded historically low interest rates for negotiating power.
- Well-priced Portland homes sell within a reasonable amount of time (average 38 days).
- Real estate is a long-term investment with rewards on many levels. Buyers will not be talking about the interest rate at which they purchased their home or the price they paid years from now. They will have created memories and made it a home and that will be the conversation.
- “Hanging in there” for things to change rarely works out. Real estate is a NOW experience. The best time to buy and sell is when life’s circumstances dictate the time is right.
- There is no “normal” real estate market. It will always swing from one pole to the other in degree with a fleeting sense of equilibrium that is nearly impossible to time.
- THERE IS OPPORTUNITY IN EVERY MARKET
Let’s put one foot in front of the other and seize the opportunities of today’s real estate market!! That is where the truth lies. No more “normalizing” or “hang in there” language for me!!!