What was a thrilling upside in real estate, is now reaching its peak. Now, real estate predictors are wondering if this leads to a cold market or another financial crash. Conversely, it could be a bump in the road for an eventual upswing. Regardless, the market slowdown is happening, so it’s imperative for everyone in the real estate agent to know the signs.
A good inventory surplus is homes selling rapidly. In a market slowdown, an inventory increase is not good. Homes don’t sell as quickly, meaning the home could sit on the market for longer than three months. The demand for homes isn’t as prominent as it once was. The situation worsens when development homes are in construction around the market slowdown peak. Consequently, the market hit a plateau from too many homes and not enough buyer competition.
The demand is drying up due to buyer disinterest. Buyers don’t see the rush in obtaining a home immediately. Buyers want to research more and take their time browsing properties before bidding. As a result, agents receive fewer bids for sellers to sort through than earlier this year. Additionally, buyers are less inclined to bid on home appeal and asking price alone. Buyers are researching the market to decide if the home, neighborhood, and amenities are worth the asking price.
The reason for fewer buyers searching for homes is due to affordability. Buyers are not willing to spend cash on expensive homes, which places a cap on home prices. The cap on home prices forces the homes near the high end to decrease the asking price just to lure buyers to bid. The financial ceiling on buyer finances, buyer demand, and home prices force sellers to create a financial ceiling in asking price. Sellers who wanted a profit based on what they paid X years ago must now focus on pricing the home to fit today’s climate. The current crop of buyers will not pay more than necessary unless it meets all requirements.
A slowdown isn’t the apocalypse, but it is concerning. Buyers are still interested in homeownership, but there’s hesitancy in bidding and closing. Agents must use their expertise and resources to convince buyers to buy a home no matter how long it takes.