I represent buyers as well as sellers, so I've seen the craziness of this year's market on both sides. (And we sold our Pala Avenue home this spring--for 25% over the asking price [I took my agent's advice to the letter....].)
As discussed in the last newsletter, my sense is that we had tremendous pent up demand, which was released once the received wisdom was that the crisis had ended.
Buyers flooded into the market and sellers, who typically take longer to get in gear and get a house on the market, did not flood the market with offerings. Cautious savers, who had banked cash preparing for the worst, wanted to put their money to work again, and the beaten down real estate market looked like a great opportunity. Buyers bid prices up dramatically.
Because appraisals are backward looking, sellers stayed cautious and took the fast-closing and slightly lower all-cash offer rather than risk that an appraisal might come in below the contract price, leading to another round of price negotiations and disappointment. Homes were sold and now those high sales prices are the new comps for today's transactions.
There still are more buyers than sellers, and all-cash offers still represent about 15 to 20 percent of all sales. It's still a seller's market. But we're seeing 3 offers rather than 13, and successful buyers are increasingly able to retain an inspection contingency (which in turn leads to a round of negotiations if the seller didn't cover the inspection bases adequately in advance).
I'm hearing various friends say that our respective college grads are now finding jobs, finally--if the economy is recovering more broadly, those boomerang kids (and their 30s-something elders) will begin moving up the housing ladder again. And maybe once we feel confident those boomerang kids won't be back, and the house feels more permanently empty, we'll feel more comfortable about “moving down” to a smaller house.--that means more supply. It's all a balancing act. But this fall (until mid-November) and again next year, just after the Super Bowl when all those young families focus like a laser beam on getting a Piedmont home before school starts, may be great windows to put your home on the market. Give me a call so we can start planning!