We’re nearing the end of what could best be described as a very unpredictable summer, weather wise. Indeed, perhaps more than in other years, this year’s weather has been wholly unpredictable, starting with the presumed ferocious winter that wasn’t. The weather pundits seemed to be guessing with their prognostications at the best of times. This summer, partly sunny with a slight chance of rain seemed to mean grey with torrential downpours mixed with moments of beautiful blue skies – or vice versa. If you wanted to plan for an event, the seven day forecast didn’t do you any good, since by mid-week everything changed. The best idea was to look outside on those sunny mornings, and be sure to take your umbrella with you. Play the cards dealt.
That same unpredictability has been a big part of the Beach real estate market so far this year. The torrid pace and craziness of the market in February, March, and part of April wasn’t totally predicted, and the sudden halt to that market was, for the most part, unpredictable as well. In the midst of that record-setting market early in the year, the easiest prediction was that if you decided to sell, you priced your property for multiple offers, and then predicted how many offers you would receive and what the final sale price would be. At that time, there weren’t too many predictions that appraisals may not hold up to the sale prices, or that the deal may not close as scheduled because buyers couldn’t sell their properties at the same crazy prices they counted on when they purchased. By the end of April, the absurdity in the market had receded.
There is still unpredictability in the market – it’s just of a different type. Those heady days of March have led to now, where the unpredictability lies in whether or not sellers are willing to accept the current market value for their property. They may be counting on some pundit’s concepts that the market will greatly rebound in short order with prices taking off again. Meanwhile, similar forces are driving some buyers to leap now, while others are holding off, thinking that prices will further soften. That’s simply trying to predict the market. But like the weather, it’s entirely unpredictable.
So, I’ll refrain from over-predicting the upcoming fall Beach real estate market, except to say (as I always do) that it’s a weekly market, with no real concrete trend up or down taking hold. I will state, for the record, that prices aren’t going to tumble this fall, or that we’ll see a rebound to the heights of March. We’re going to witness a more rational and level market in place of an irrational market. If they’re motivated to sell, sellers will need to look harder at their list price. They’ll need their agents to be sharper on list price and know which way the local marketplace may be trending at that moment. They won’t be able to count on an easy strategy of listing at an artificially low and irrational price in order to attract a good number of offers, crossing their fingers that they receive the price they really want and need. On the other side of the ledger, agents representing buyers are going to need to give their clients better advice on a property’s value, rather than simply telling them how much they’ll need to pay based on how many offers there are. Remember: just because a property doesn’t have multiple offers doesn’t mean that it’s overpriced and that the buyer should move on. There may be negotiations to do – some back and forth and long nights by both sides. In a market such as the current one, buyers can do well if their agent knows how to negotiate.
Despite this semblance of calm, the Beach real estate market will still have moments of unpredictability going forward. Desirable neighbourhoods such as ours usually do. Yet, it will also be much more rational than we’ve witnessed in the first few months of this year. It won’t be a normal market, because we’re not sure what a normal market is anymore.
The pundits predicting a collapse to the market versus those who see a swift upturn around the corner have their arguments, statistics and facts. The meteorologists have their models and charts, too. At the end of that “partly sunny with a slight chance of rain” day, you’ll sell or buy for what the market offered at the moment. Play the cards dealt.
Thomas Neal is a well-known and respected Beach real estate agent.