To be honest, we had all eyes on October hoping for an uptick in transaction activity. It didn’t happen. The fall market deal volume has been painfully slow.
On the supply side, we have likely topped out on new listings for the season and are beginning to see listings taper off. This is uneventful and we are generally in line with seasonal levels of prior normal years. Sellers are being patient and waiting for macro issues to stabilize. Panic selling is not happening.
On the demand side, the buyer pool that is out there and ready to transact, however, is slow and looking for a deal. The negotiating discount now for buyers is in the 5-7% range off listing price. If this lines up, deals are getting done albeit fewer and . The Contracts Signed number is down 22% from last week. To put that in perspective, historical norms put contracts signed at the end of October at about 890. The actual number for the end of October is coming in at 736 indicating that macro events are a contributor (inflation, rising interest rates and the general uncertainty of when the turnaround will occur).
What should sellers do? What should buyers do?
Let’s answer the question about what buyers and sellers should be doing. People transacting in the market during times like this have their own individual points of view. Many ask our opinion as to what to do and we do our best to customize that conversation to their needs.
Having said that, in general terms, we find the following points to be quite important for both sellers and buyers:
What should a Seller focus on in this market?
- Don’t be price aspirational. That’s a big mistake right now. Price well. Realistic pricing is key
- Presentation is beyond important. In this market – staging is much more important than in a fast-moving market
- Be the listing the serious buyer comes to see
- If you have an apartment that needs a renovation, it’s going to take longer to sell. Buyers understand costs to renovate are up 50-100% when compared to pre-pandemic times
- Prepare to be on the market longer in slower moving markets
What should a Buyer focus on in this market?
- Don’t time the market – it does not work
- When people are on the sidelines because they are feeling surrounded by uncertainty, that’s the best time to be a buyer
- Yes, interest rates are higher right now but take a longer view. If you find an apartment that suits you at a price point that can get a deal done, remember you can always refinance when rates come back down
- In times like this, the competition is low making it a great time to be out there
Our advice is to remain calm and communicate with us no matter which side of the transaction you may be on.
Call us anytime to schedule a discussion. As always, stay safe and Happy Halloween!