The last quarter has been an especially tough one for buyers. Most properties have multiple offers on them, often over the asking price — that is, if they make it to the open listings at all before they sell. Buyers’ agents are using every trick in the book to secure contracts, throwing every imaginable incentive at sellers.
Buyers are assuming all the risk while sellers are sitting pretty.
- Buyers are entering into contracts without seller-provided property inspections.
- Buyers are risking their deposits by waiving mortgage contingency clauses which would allow them to walk away with their money if they can’t secure a mortgage.
- Buyers are also waiving appraisal contingencies, which would allow them to back out of a contract if the home is appraised at less than the purchase price.
- I’ve heard of several buyers allowing the sellers to remain in the homes until they want to move out, often rent-free.
The market is over-inflated, but a slow-down may be on the horizon.
If I were a betting man, I’d expect the markets to quiet down heading into the fourth quarter of this year. More people are settling in to their new homes. Families are spending the summer traveling and vacationing for the first time in more than a year. Kids are going back to the classroom this fall, and workers will begin returning to their offices.
When market activity slows, prices will begin to drop.
My take is that, since we’re in a reassessment year for real estate taxes, taxes will likely rise alongside the higher property values this market has created. Higher taxes could cause some downward pressure on pricing. Market experts also predict an increase in both inflation and mortgage interest rates. I believe this will cause some activity to recede in 2022.
This summer remains a glorious time for sellers.
Likewise, this season will continue to be a rocky road for buyers.