There will always be an occasional low sale here and there.
What would cause home prices to really slide?
There would need to be a series of low sales in the same area to create downward momentum. The next seller would have to be convinced that lower prices are a fact, and without an obvious trend, they will be reluctant to believe it.
Here’s an example. Even though this lowball listing (in red) undermined the two comps over $2 million, the next seller wasn’t convinced, and they listed their home for $1,975,000. They have lowered it since, but you can bet they are digging in now – and the market is in their hands:
If they hold out and get close to their price, then the lowball sale will be dismissed as one-off, and other sellers in the future will ignore it….and hope the buyers do too.
These are the standoffs happening everywhere now. ALL sellers have plenty of equity and could go down in price if they really wanted – or needed – to make the sale.
But will they?
Generally speaking, the agents might go along for 30 days or so, but they aren’t used to sitting on unsold listings for months. They are going to nudge the sellers to lower their price, but those drops need to be in 5% increments to cause a meaningful reaction from the buyers.
Will some sellers surrender? Yes, but only when confronted with a lower offer. Currently we are in the Buyer-Vacation stage where few are in the game and making offers, and without solid proof, the sellers are more likely to wait, than dump.
The 2023 Selling Season will be the most anticipated market in the history of the world!
New update – another price reduction. Buyers are on vacation now, we’ll see about 2023:
There will always be divorces, health issues, subsidized relocations, etc.
Yes – with heightened awareness and natural resistance to loss.
It would be great if the current real estate conundrum would cause seniors to un-paralyze themselves and act sooner, rather than keep waiting for a time that they will feel more comfortable.
Not only is that time not coming, the older you get, the harder it is to move.
Prices went up because gubment injected unprecedented amounts of money into the economy. Not because people believed prices were going up. The gubment is not withdrawing the same money. Prices will go down for this reason. Not because of the psychology of comps.
OMG! You are correct. I need to act now to escape from my Prop 13 low tax suburban single story to an urban walk up rental. Ummmm, no. When downsizing doesn’t result in savings expect 55+ to age in place. And do not discount my predictions for self driving cars and other tech keeping people in place far longer than ever supposed.
OMG! You are correct. I need to act now to escape from my Prop 13 low tax suburban single story to an urban walk up rental. Ummmm, no. When downsizing doesn’t result in savings expect 55+ to age in place. And do not discount my predictions for self driving cars and other tech keeping people in place far longer than ever supposed.
I’m speaking to those who are into their 70s and physical ailments are setting in. It is challenging and demanding just to find another house to buy, let alone have to sort through the stuff/junk.