What the Shifting Market Means for Sellers
In the Greater Portland area, we have been in an intense seller's market for the past two years. With historically low inventory, and a large buyer pool fueled by low-interest rates, it was a perfect combination for properties to literally fly off the shelves! This meant that as soon as a house hit the market there were showings booked immediately, often filling every showing time slot available. Sometimes interested buyers were not even able to get in to see a property before there were offers made on the house. Multiple offers were expected on every appropriately priced property. It was not uncommon for there to be offers into the double digits for sellers to review. Buyers were going without inspections waiving their financing contingencies and basically giving the seller whatever they wanted to create a competitive offer to get the house.
Although this is great for sellers, this type of market is not sustainable and also brought its own challenges. We are beginning to see some shifts in the market. Headlines everywhere are talking about the shifting market and some are spreading worry about a housing crash. There certainly has been a shift in the market in Greater Portland, but much of what we are seeing in the current market is sellers adjusting to buyers’ new purchasing patterns. With interest rates rising, buyers are taking a pause before making snap decisions on offers and they are holding back from giving up all contingencies. There are many buyers in the market that see this time as their opportunity to get into a house with the market’s competitiveness waning slightly. There are also a large number of buyers that have been shut out of the market over the last two years due to smaller down payments or their financing. Those buyers are now more capable to compete in today’s market and they are motivated to finally have the chance to buy.
The shift that we’re seeing in the Greater Portland has been very location and property specific, meaning that houses coming on the market in our most desirable areas and our most competitive price ranges are still almost definitely going to be multiple offer scenarios. With this being said, we don’t expect to see a sudden shift to a buyer’s market or a steep decline in median prices as we did in the 2008 housing crash. This market is very different from that. In our current housing market homeowners have more equity in their homes than debt. The standards for loan approval are also far more stringent. Loan applications go through an extensive underwriting process to ensure the borrower’s ability to pay back the loan. Although inventory has increased it is still very low. Currently, in Cumberland County, there is just over a month's supply of active housing inventory on the market. In a balanced market, we would have 6 months supply of inventory. This continued lack of inventory is why we aren’t seeing home prices decrease significantly even with a market shift.
The key for sellers right now is to properly prepare your property, make sure your property is marketed appropriately, and most importantly priced correctly. Currently, if you price your property too low you may not get the offer you’re looking for, and if you price too high you may sit on the market for longer than you’d like and likely will end up getting less than you had hoped for. This market is all about strategy and working with a Realtor that knows the current market. If you are in need of a real estate expert to come alongside you in your buying or selling journey, do not hesitate to click here to get in touch with me, Rachel Davey, directly. I look forward to speaking with you!
