Are Multiple Offers Back?
Multiple Offers are happening in the market again
But it’s not like last time.
At least, not yet.
For the most part, despite receiving multiple offers, homes are not selling for over the listing price and sellers are not setting an offer date to hold off offers in an effort to stir up a bidding war. And home prices are significantly lower than they were before.
So this situation doesn’t have the negative feeling as we had before and it doesn’t mean we are heading back in that direction.
I’ll tell you why I don’t think we are heading back to a market where it feels like an auction.
First of all, buyers are being patient and waiting for the right property to purchase. They are not experiencing the same FOMO they were in 2022 where they felt like they needed to jump in the market at all costs.
Plus, in January 2023, the average list to sale price was about 93%. Homes are still selling on average below the asking price. Buyers are expecting a deal and despite the multiple offers, homes still aren’t selling high and pushing the market average up.
And, with a list to sale ratio 25% of active inventory selling, overpriced homes are sitting and not selling right away. Despite the efforts of the 1200 Realtors in our area, 3 out of 4 homes are not selling.
Inventory is increasing but isn’t necessarily what the average home buyer is looking for. But when they find what they want, they are acting fast.
Multiple offers are happening in select pockets of the market, but it isn’t the chaos that we have seen before.
Multiple offers are happening in select pockets of the market, but it isn’t the chaos that we have seen before.
There is pent up demand for well priced homes that are in great shape. That demand means more than one qualified buyer is likely to submit an offer on a quality property.
All that being said, offers aren’t necessarily subject free. Buyers are able to perform their due diligence in most cases and submit an offer with some subjects and conditions.
This is a healthy, balancing market.
What could change that?
If for whatever reason inventory starts to decline, or isn’t replenished at the same rate it is being sold, that will put upward pressure on prices.
Or, if the market becomes flooded with new buyers either through migration or a dip in interest rates allowing more people to qualify for a higher mortgage, prices would also start to appreciate more than the historical average and may put us back into a bidding war situation.
I don’t think this is going to happen but it’s something to keep an eye on.
If we are seeing multiple offers, and a balancing market, is it possible we have already seen the bottom of the market correction and prices have bottomed?