The CRAZY Real Estate Market – Now What?

The low inventory, low interest rates has resulted countrywide in multiple bidding with people offering astronomically so much higher than the list price given. SO, they have secured a home, will it appraise? Will it maintain its value? Will the taxes increase? and will they have buyer’s remorse? Why a low inventory? So many questions, and so much frustration in some cases.

What caused this frenzied buying? Per an article from December 2020 by Issi Romem from the New York Times, Issi comments on first time home buyers, renters wishing to purchase their first home based on the low mortgage rates, people buying a second vacation home, all contributed to the flurry of purchases and also the relative ease there is in being able to purchase that home. Many sellers realizing they can’t afford to downsize at the higher price points are staying put in their homes!

Living in Westchester, we certainly witnessed the multitude of buyers leaving the city in search of a home that offered some tranquility away from the pandemic and busy city, especially since they would be working from home. Those buyers also purchased up along the Eastern starboard in record numbers. Lumber and building supplies have become more expensive, and new homes are taking longer to build with an estimate $30,000+ more to build by one account. Some companies had expected a housing slump, and slowed down production which never happened, and so now there is not enough lumber causing the high prices.

A year plus ago, we did not know if the market would drop or increase as a result of the Pandemic, and those clients who took advantage of listing their homes for sale, certainly had no regrets with multiple bidding across the board upon making the decision to sell. 2021 only brought forward even more buyers, even high prices and the same low inventory. Many buyers were offering $50,000, $100,000, $300,000 more than the list price in order to secure a home purchase. Some buyers would sign a contract, and send a deposit check along with a bid in the hope of having their offer accepted, some agents used accelerated bidding ( offering X amount over the highest price point offered with a pre determined cap). No inspections/no contingencies were the norm, along with all cash, and even allowing home sellers to leave their unwanted items ‘to make the process easier’ for them.

Agents have had a difficult time pricing a home for sale. The rule of thumb has been to list commensurate with the current real estate market stats, and then let the market ‘speak’ per se.

As a local top agent, I always advise my clients to only bid an amount they are comfortable with. I am proud to say that I have many repeat clients, and I truly wish to keep it that way! I would not want any client to have regrets of any kind. A home should be determined by location, schools, size and affordability! With so many people spending so much more on purchasing a home than the stated list price, it was only a matter of time before we heard of homes not appraising. Of course, this was a momentary transition for as soon as the homes sold, market prices are then established with appraisals for the most part okay. In some areas (such as Scarsdale, Bronxville, Pelham, Larchmont, ) taxes are increased commensurate with the new home sale price, and it would seem that some agents did not advise their clients of same causing some consternation there I am sure. Emotions ran the gamut, with people getting tired of bidding on so many homes without success, and basically stepping back from the process, or choosing a different area hoping prices were more amenable.

Hopefully, those newly established prices will maintain their value 3 years from now, etc. It is also expected that interest rates will be higher at year’s end and enter the 4’s next year BUT still low!!

SO, choose your agent wisely, one who knows the area well, who will listen to your concerns, and who can help you in your home search at the pace you want. Make sure you have a good real estate attorney, a good mortgage broker, and the rest will follow!

“A home is just a place to keep your stuff while you go out and get more stuff.” George Carlin

Westchester is GREAT!

About Gay E. Rosen

Gay E. Rosen is a Top Realtor in the Larchmont and New Rochelle (Lower Westchester) area. She is diligent, caring, driven and thorough (with a sense of humor).Utilize her expertise. Call her!
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