Some sellers are entering the market because of the unprecedented prices they are seeing properties similar to theirs selling for. Lurking in everyone’s minds is the fall 2008 sudden market implosion that saw the record-breaking high prices disappear. Shortly thereafter Northern Nevada regional values had dropped 70%.
We don’t see that happening now for reasons we recently wrote about, but there is talk of a subtle market adjustment. Prices have started dropping in the Multiple Listing Service, but to any great magnitude yet, and likely is just a big of a market check as many people were listing high shooting for the proverbial grand slam instead of a two-run homer. Inflation is being talked about. With inflation comes higher interest rates. With higher interest rates property values drop. Watch the economy closely, it could impact you. Beware the I-word.
Grandkids are a large motivator for people moving to the area, or selling and moving to where their grandkids are. Grandkids have replaced divorce as the Realtor “full employment factor.” Life is too short to not contribute to your familial legacy and the high values allow Sellers to be able to capitalize their move to fulfill their emotional desires of being with family.
Buyers are paying prices that defy logic, and are happy to do it. There are several factors contributing to this scenario. Some are escaping a lifestyle that has become undesirable and yearning for the joy of living that we enjoy in Northern Nevada. Others have a neighborhood specific desire and are willing to overpay for the privilege of living exactly where they want, even if they pay too much. What is spending a little more for a property than it is worth and having what you want vs. having the money in the bank and compromising on the lifestyle you really want? In that case you are getting an emotional return on your investment which is far more rewarding in its return that a percentage of financial profit. More people are making such buying decisions.
Rightsizing is in everybody’s mind as they approach the market. Buyers don’t want a home or lot that is too big, or too small. Likewise, the sellers are often transitioning to a home that fits their current lifestyle better than what they presently have. When the next empties you don’t have the handy lawn mowing offspring readily available week in and week out. Living on a couple of acres with animals without your youthful assistants? Maybe it’s time to let someone else enjoy that lifestyle.
Other motivators can include the need to remodel/upgrade and you are short of capital, commuting time to work has changed, preferred school district necessitates a transfer, friends/family are clustered in another neighborhood and you want to live nearby, neighborhood isn’t transitioning as fast as you would like and you are ready to upgrade, neighbor/neighborhood issues that affect you but shouldn’t bother a new owner, etc.
There are many motivators that impact buyers and sellers. It is important that you identify what motivates you so you understand why you are reacting to market scenarios when they are presented to you. Similarly, find out as much as you can about the motivation of your potential counterpart in a transaction and you will be able to write a stronger more appealing offer, usually without giving up much financially.
Motivation and timing is everything in real estate. If you understand everyone’s motivation you will be able to adjust the timing to perfection and initiate a smooth escrow that is beneficial to all involved.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. email@example.com