It was just a couple of months ago that we were in a super strong seller’s market that caused many buyers sleepless nights as they pondered and worried about doing the right thing as their efforts resulted in little or no tangible results in their quest to buy a home. Sold before hitting the market, multiple offers, offers being held prior to reviewing for days at a time yet they said a decision could actually be made at any time, and more. Very frustrating times for buyers. Over the past couple of months, interest rates have about doubled, housing inventory (residential lots included) has increased, and offers are not as forthcoming as they were just a short time ago. Homes can now be on the market for a couple of weeks without seeing an offer. While this is actually quite normal in the real estate world, when it is compared next to the tumultuous market we experienced over the past 18-24 months, it seems as if we are dead in the water. Actually, the market is viable. Prices are being adjusted downward a bit, but nothing like the freefall of 2008-09. Some interesting things are occurring, however, that can give pause to ponder. Nationally, 14.9 percent of the active escrows in June canceled. It is risky comparing our Northern Nevada market to national phenomenon as we have limited privately owned land (remember, Nevada is 87 percent federally owned) and we are close to our feeder market, California, which allows for the refugees that make it here to go home and visit friends and family. Some escrows are being lost due to the loan locks either expiring, or, in some weird instances, the lenders not honoring their rate locks due to the dramatic increase in rates. Either way, escrows are lost. This is impacting builders in a big way as their escrows are extended longer than the average escrow due to the time required to complete the build. It often exceeds the term of the rate lock. That leads to interesting discussions. Can the buyer qualify at the new rate? Do they want to qualify at the new rate? Will the builder buy the rate down for a period of time? Will that be long enough for rates to come back down, and the buyer refinance their loan? The media has been pushing for a financial crash for a few months now. They broadcast the message even as buyers are still looking and buying. Some buyers are now saying they will wait for the market to come down, but what if it doesn’t crash as far as they hope it does? Other people are still wanting to buy the same home you want to buy. Who is going to step up first and own the house and get the emotional return on their ownership investment? That is the benefit of home ownership and the enjoyment of living in the home of your choice. If the market falls in a big manner, things like inspections and appraisals become more important. The results can open the exit door for a buyer leaving the seller holding their home. This stops the dominoes from falling in a contingency sale causing tight jaws all around. Make sure your home is in good shape for showings, appraisals, and inspections to lessen the opportunity for a buyer to get out of the deal. It is more important now than when buyers would overlook deficiencies in their zeal to compete with other buyers. Sales are still strong at this point. Be smart about your real estate moves. Watch the national and local economies and see what buyers and sellers are doing. What is important isn’t necessarily what the media, or even the agents say, rather it is what buyers and sellers are doing and willing to do. And more importantly, what buyers and sellers in Northern Nevada are doing. The one thing you can count on in real estate is change. The market will ebb and flow over time. It is important that you flow with the changes as you work to satisfy your needs. When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, BS.3481, 775-781-3704. dpwtigers@hotmail.com
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