Location, location, location
You don’t have to be looking to buy or sell a home to know there’s a nationwide problem with the housing market. Of course, some locations are stressed more than others. And the stress spills over into the rental market.
I’m certainly no expert. We lived in our first house for 35 years. That was the only house we’ve sold. And both that house and the one we replaced it with were purchased without ever going on the market. The first we bought directly from the seller, without an agent. The second we bought with the help of buyer’s agents who worked for the same company as the seller’s agent. When we sold the first house, the buyer wanted us to take $25K off the asking price because the 95-year-old house had live knob-and-tube wiring. We haggled him down to $17K, but we’d already bought the replacement and needed the cash. We paid cash for the second home without getting an inspection and ended up making about $25K worth of repairs after moving in.
Home prices are way up from the pandemic low. While some argue that they’ve merely corrected to the historical average, it sure doesn’t feel like that to buyers and sellers in some markets. Both are walking away from deals.
“Buyers, many of whom are struggling to afford record-high home prices but feeling emboldened by having more inventory to choose from, are proving increasingly willing to end contract negotiations when they disagree with sellers over things like presale repairs.
“A portion of sellers, meanwhile, have hefty equity positions and low mortgage rates that leave them in no rush to move. When contract negotiations hit roadblocks or they can’t get the price they want, many sellers simply pull their homes off the market.”
How serious is this? What are the numbers?
“Last month, 57,000 deals — 15% of all homes that went under contract — fell through, the highest share of canceled deals in June going back to 2017, according to Redfin. The brokerage cited factors like financially stretched buyers and ongoing economic uncertainty for the spike.
“Delistings, where sellers take their homes off the market without a sale, are also on the rise. They jumped 47% in May from a year ago, outpacing recent inventory gains, according to Realtor.com. This move suggests that many sellers would rather stay put than adjust to current market dynamics.”
Of course, for folks in places like San Francisco, NYC, Boston, Washington DC and Vancouver BC, this is a familiar story. There’s just not enough new construction coming online to sate the demand. Eventually, things will sort themselves out, maybe with the next recession.
canceled home sales contracts surge
I’m certainly no expert. We lived in our first house for 35 years. That was the only house we’ve sold. And both that house and the one we replaced it with were purchased without ever going on the market. The first we bought directly from the seller, without an agent. The second we bought with the help of buyer’s agents who worked for the same company as the seller’s agent. When we sold the first house, the buyer wanted us to take $25K off the asking price because the 95-year-old house had live knob-and-tube wiring. We haggled him down to $17K, but we’d already bought the replacement and needed the cash. We paid cash for the second home without getting an inspection and ended up making about $25K worth of repairs after moving in.
Home prices are way up from the pandemic low. While some argue that they’ve merely corrected to the historical average, it sure doesn’t feel like that to buyers and sellers in some markets. Both are walking away from deals.
“Buyers, many of whom are struggling to afford record-high home prices but feeling emboldened by having more inventory to choose from, are proving increasingly willing to end contract negotiations when they disagree with sellers over things like presale repairs.
“A portion of sellers, meanwhile, have hefty equity positions and low mortgage rates that leave them in no rush to move. When contract negotiations hit roadblocks or they can’t get the price they want, many sellers simply pull their homes off the market.”
How serious is this? What are the numbers?
“Last month, 57,000 deals — 15% of all homes that went under contract — fell through, the highest share of canceled deals in June going back to 2017, according to Redfin. The brokerage cited factors like financially stretched buyers and ongoing economic uncertainty for the spike.
“Delistings, where sellers take their homes off the market without a sale, are also on the rise. They jumped 47% in May from a year ago, outpacing recent inventory gains, according to Realtor.com. This move suggests that many sellers would rather stay put than adjust to current market dynamics.”
Of course, for folks in places like San Francisco, NYC, Boston, Washington DC and Vancouver BC, this is a familiar story. There’s just not enough new construction coming online to sate the demand. Eventually, things will sort themselves out, maybe with the next recession.
canceled home sales contracts surge
It would be interesting to compare these stats with the post housing crash numbers. That was a buyers market too.
Is an understatement. The newest tract about a mile or so from us went into presales. $444K for 1320 SF. It’s new, has solar and is wired for an EV charger. Smart too, per the billboards. Nice for an older couple being single story. The right size for a couple just starting out. But the price! Monthly payment is just a hair under $3K a month, including impounds but no mortgage insurance. 30 year conventional with 20% down. The other homes are bigger, of course, with correspondingly higher prices. Their smallest home is out of reach for more than half the population of the state.
Builders are building smaller homes but the prices are not coming down. You pay very little less money and get a much smaller home.
@Jane,
Where is this? Rifle CO? Rockwood TN? Cambridge NY? Grand Island NE?
@JaneE
In my smallish town in Oregon prices are higher. I can’t see anything new under 1600 square feet. I doubt our community has many first time buyers.
@Joel
On the other hand, when I had to sell rental properties (60 years old and under 1200 sq ft) for my father’s estate, my realtor recommended getting a home inspection and fixing any major issues before putting the house on the market.
@Arne,
When we were offered the RI house we ended up buying, we had previously made offers on three houses and were outbid. For the first offer, we made inspection a condition and it was rejected out of hand. The other two offers we made didn’t require an inspection.
The prospect of not having to bid in such a hot market was seductive. Add to that, the owner had moved to Boston months before, so he may not even have known about some of the problems. The house is 90 years old.