🌩️ There has been a veritable perfect storm of events and issues looming in our very own East Bay, as well as the rest of the country…
🗳️🚨 Interest rates are still very high, and the promised rate decrease has not arrived as I write this. Add to this that it’s an election year, which is notoriously bad for real estate sales in the short term, and you also have doom-and-gloom headlines about crime in our inner cities, and then add to that the concerns about the commission lawsuits and the ramifications on the way real estate is practiced... Then there is the cyclical slowdown in August—people taking their last vacations before the kids head back to school—and you have the challenging times we are in.
🏡 💼 The pent-up demand is palpable though, and inventory, although increasing, is still far below where it needs to be. Many people who would ordinarily downsize aren’t. If someone wants to live in the Bay Area, why would they walk away from a 2.65 mortgage rate to get higher property taxes and a smaller, less wonderful house? So it is a mixed bag, and we are not in a situation like 2008, when realtors like me started noticing that the market had come to a veritable halt.
💰📉 No, it is more like a little pause button on a normally vital industry, and we have many places to blame, but few solutions as to how to overcome it. Now, more than ever, realistic price expectations are key, and do not spend too much upgrading your property as the return will be significantly less than in the halcyon days of 14% annual appreciation. Look at prices from 2019, and let them be your gauge when thinking about prices you could get for your property. That is much more realistic than harkening back to 2021 or even 2022.
I recently was at a listing appointment for a house that had been on the market with another realtor for over 60 days. When I got there, I could see the problem was definitely not the price, which was low. It was dull and tired looking, and no life energy throughout. The way it was sited on the lot meant that it was dark all day long, and clearly was the spot where all the water from the hillside would seek out; there was a dampness to the lower level, and an overall coldness that was present, even on a very warm day. The marketing had been lackluster along with the staging when it was on the market, and although a lot of the problems of the house could not be changed, pricing well and good marketing would go a very long way. Good staging would be about half the solution!
The seller kept repeating that they were prepared to spend over $100,000 to renovate the house. I kept saying I did not think that was necessary, but a few days later I got an email letting me know they had chosen to go with a realtor who "shared their vision" for the house—as in, they agreed the sellers should do a complete renovation.
💡💸 I am really concerned that these young people will unnecessarily spend tons of money on a renovation which will not really resolve the issues of the house in a market that is not what it was in 2021. I hope I am wrong, but I genuinely feel that right now is a time to do less renovation work and more transparent pricing, look at all your options, and go with modest choices in a market like this one. It will genuinely benefit you in the end. Not everything has to cost a lot of money, and small changes can reap big rewards.
