10/6/2015: Real estate market has peaked

I realize this is not a popular thing to say. You guys are probably like whoa kimosabee pump the breaks there. But you need to hear this. Real estate market has peaked.

Things got out of hand the past 2 years. Open houses with 50 people. Homes with 5+ offers. Sellers demanding buyers remove home inspection and financing contingencies. Don’t even get me started on bid wars. 35 Derby sold last year for $190k over asking. Saw the price and was like…

bruh

In 2014, the average list price within .5 mile of Randlett was $676k. Homes sold on average $12k above asking. In 2015, the average list price was $840k. Homes sold on average $20k above asking. So home values increased on average $172k in 1 year.

So why this huge increase in value? Did our homes really get that much better? No. Buyers bid up the value of our homes because they were trying to beat out other buyers. Not because they were making offers based on the true value of the home.

But that’s changing. And 29 Vincent is a perfect example.

Nice home that was priced at $879k — near the neighborhood average of $860k. Very busy open house last weekend but didn’t sell. 6 months ago this place would have gotten 5 offers. Not anymore.

IMG_3605

Buyers don’t want anything to do with bid wars. They’re starting to take a value-based approach again. This is a good thing. Will lead to a healthier, more balanced market.

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