A long-awaited window of opportunity has opened

Sellers in SF have had the upper hand since 2012. However, in May we started seeing heavy volatility and declines in the financial markets. Interest rates climbed above 6%. There are worries about inflation and mumblings about tech layoffs. Whatever the reason, a cooling demand is beginning to show up in the real estate market, and it’s manifesting strongly in pending home sales data.  Here are the latest trends: These trends show that supply is beginning to build, sellers are reducing prices, and the number of homes going into contract is significantly down. Although the market is heading into the typically slow summer season, the inventory is historically high for May (the latest numbers available). While there may not be a single reason behind the drop in activity and increase in inventory, one thing is clear: After 10 years of getting battered and bruised, a long-awaited window of opportunity has opened for buyers.  So, what does this mean for sellers? Market changes are often uneven in the early months of transition, with one home selling in days at huge overbid price, while next door, the seller has to reduce their price to get an offer.  Prices follow deal volume, so a slowing market means prices have most likely peaked in Q1. However, a slowdown does not mean that the market is weak by any normal standard. People will continue to have personal and financial reasons to buy and sell homes. Contrary to what you may read in the news, a slowdown does not suggest that prices are in for a freefall. Instead, the market will most likely slip from a seller’s market to a neutral market this summer.  As the market cools, buyers become more discriminating, negative conditions previously ignored are noticed, more negotiating occurs, multiple offers and overbidding decline.  Listings that are well prepared, staged, show well, and are priced right, will have an increasing advantage over the competition.  What does this mean for buyers?  After the largest and most dramatic upcycle in the financial and housing markets over the past 2 years, a slower market means a break from the bidding wars and sellers more willing to negotiate.  To take advantage of this window of opportunity, buyers should have their financials buttoned up, understand the inventory, and not ignore stale properties (often times these will have more motivated sellers willing to negotiate).  Sellers tend to withdraw their listings when they cannot sell at the price they command. In this case, supply may be squeezed again. Therefore, the next few months may offer both choice and negotiation for buyers who are less sensitive to rate change and financial market fluctuations. Complete market report Is someone you know, ready to move? Let me know - I can help Keep well, Maggie marketingcenter-sfbayarea-sfcityproper