These are confusing times in the housing market. There are lots of mixed messages with little consistency. Inventory is down in some places while other markets have an oversupply.
Over the past few months, a record number of homes have been delisted in some metro areas like Miami, Fort Lauderdale, West Palm Beach, Phoenix, and Houston. The share of houses taken off the market grew faster than the increase in the number of houses put up for sale. More people were taking homes off the market than listing them.
Why?
Well, some sellers are losing patience in a market that’s taking longer to deliver offers they’d be willing to accept. (#greedy and #delusional). They’ve also probably hired an agent who told them what they wanted to hear, not what they should have heard.
For many of these sellers, this has a lot to do with ego and stubbornness. They aren’t desperate to sell, so they wait out the market until they get their price. This saves them from an uncomfortable conversation at dinner with their friends.
Developers, on the other hand, don’t have this luxury. They can’t delist their property and wait for better days. I’ve seen buildings built as condos turn rental, but this is a Hail Mary, and the developer loses out.
A few years ago, our team was hired for a project that wasn’t selling. I advised the developer to lower prices and let the market dictate their value. The product was ill conceived. They had built the wrong product for the location, and not very well.
I was fired shortly after my candid conversation with the developer.
They went on to hire their fifth broker, who, a few years later, had still only sold less than a handful of apartments... at a deep discount. It is now eight years after the building first came on the market, and much of the inventory remains... in a city with a lack of housing.
So silly.
So, while inventory is shrinking in some areas, homes have been sitting on the market for more than 3,000 days in others. It’s confusing. And there are a growing number of buyers who think they can navigate their home purchase through a website without the help of an experienced agent.
To them I say “best of luck”.
Let’s do this.
Shaun