MARKET NEWS

Just last spring we were talking about unprecedented supply constraint coupled with high demand. This explained why prices were still on the rise in Southern Maine despite slow downs in other markets throughout the country, and concerns about debt ceilings and housing bubbles.

Now here we are in October and the Fed has pushed rates over 8%. Not only are we in our seasonal downward trend in transactional activity, but we have rates the likes of which we haven't seen in a while (or for some of us, ever), stunning even the seasonally unaffected buyers into a moment of more careful consideration before they offer on a property. 

Some segments are feeling it more than others, like condos, the luxury market, and fixer uppers of any kind. These are taking the hardest hit to showing and offer activity in my view. There are those segments that are still in good demand, like updated, maintained single family homes in good locations and in median price range (assuming they are not overpriced). However, even in that market range, if you are assuming you will receive multiple offers guaranteed, you might be under the spell of nostalgia, and it might bite you if you let it guide your listing strategy.

What does this mean? Well, it's not doom and gloom. Buyers are still out there. Properties of all kinds are still transacting. But they are transacting with less ambition on the buyer side and it serves no seller to ignore that fact. Don't buy the hype if you see realtors on instagram promising that they can still sell you house like it was 2021. Realism is healthy. If you want a realistic look at how to sell your home in this brave new market, reach out. 

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We are in a unique place in time. We are on the tailwind of a pandemic fueled market boom that saw an unprecedented shift in the ratio between supply and demand. Now that supply and demand is shifting again. 

Thanks to the refinance boom of the Covid market combined with other current economic factors, many homeowners are unmotivated to sell their homes at the moment. I hear a lot of people say things like, "I'll wait for things to calm down before I sell." The effect is that supply of homes for sale is so constrained that it's keeping the sellers who do come to market well-positioned in the marketplace. This is why prices are still up even as sales volume is decreasing (number of transactions is decreasing, not price per transaction). 

An interesting thought is that this dynamic is also creating something of a backlog of would-be sellers just waiting for the "right moment" to list. It will be interesting to see how that impacts the market in the near future. Some would argue it's better to be a seller now while supply is constrained, then later if supply booms. Of course the wisdom of that argument depends on what demand is doing.

Currently, demand is still good. It's cooled to be sure, but it's still outpacing supply in Greater Portland across most market segments. Still, between higher interest rates and the economic climate, buyer appetite for throwing caution to the wind with aggressive offers has been suppressed. Buyers want reassurance that they are making a smart purchase - the correct purchase for the current market. In many cases (exceptions abound for those perfect prize properties) buyers want to hold onto inspections and some form of an appraisal contingency to ensure they aren't overspending. What does this mean for sellers?

It means sellers and their realtors need to get the listing exactly right to optimize the sale. There's little margin for error in current market conditions. Getting a listing right is all about presenting the property in a way that inspires buyer confidence in the quality, cost, and lifestyle of the property. A lot of realtors talk about properties struggling to sell because the property itself is deficient in some way. They say, "it's not a great listing." Given the extreme shortage of supply, I'd say at the moment there is no such thing as a "bad listing." There's no excuse for a listing in our area to languish on the market right now. I have more active buyers on my white board today than there are single family homes listed in all of Portland. And I'm only one broker. So there's no bad listing, only bad listing strategy. If a property is not selling in Greater Portland right now it's because the marketing is wrong, the photography is wrong, the staging is wrong, the price is wrong. Even a locationally challenged fixer-upper should sell if it's positioned correctly within the marketplace. 

The reality is that it's a good time to be a seller today; pricing is strong and competition is high. The metrics indicate that we're still in a seller's market as we have been for over a decade in the Greater Portland area. But the metrics tell us something else too. They tell us that we are moving closer and closer month over month to something that resembles more of a neutral market. We're not a market in decline currently, but history tells us that one day we will be. That's how it goes in real estate: up and down and back again. It's impossible to guess when exactly the down is coming. For now while we're up, if you're a seller who has the motivation and stability to take advantage of this market, then I encourage you to get your listing together sooner rather than later. Call me. I'm here to get your listing just exactly right to optimize your sale.