It doesn’t seem like there’s much for buyers to celebrate in this current market, but there is a slight bit of sunlight on the horizon. That’s in the form of builders losing some of their once captive share of buyers. Buyers are now seeing a nearly a year of wait time before their home will be ready; so the masses are turning back to existing homes. Further, some potential buyers of new homes are getting called into meetings with their builders, where they’re told the price of their home has gone UP, forty, fifty, eighty or more THOUSANDS of dollars. That’s due to the screaming rise in construction materials cost…due to constraints…whether real or created. But that’s another day’s thoughts.
Builders are a critical part of our development, our economy. They keep the housing market moving forward and they help buyers achieve their home purchase dreams. And they provide thousands of jobs. But they also cannot handle the load. Not in this market. Not today.
Because the wait time for new homes has become so long, in part because of demand and in part due to supply chain issues, buyers are coming back to the normal market of existing homes. I can almost hear the sighs of relief from home sellers.
Each time I show property, I hold my breath until I find a window of time available and I hope the home doesn’t sell before I get my clients to it. It’s still a zoo out here. I am seeing some sellers being more reasonable about pricing and expectations about up front funds, because some of them have lost out to builders in the past. So I am seeing some sense of reasonableness about due diligence amounts and even earnest money. Did you know that many buyers are offering zero earnest money now? That’s because the due diligence requirements are wiping out their discretionary funds.
I find this whole due diligence thing entirely ridiculous, because that money goes back to the buyer at closing anyway; so the whole idea is set up to HOPE the buyer walks away.
Builders are holding off releasing product until they have a certain amount of construction completed, thus making the time to close shorter, but that doesn’t help the bottleneck of supply. Why? Because the time to build is still stalled by supply chain constraints of pieces parts of a new home.
So what is this all about? Well, buyers are getting a SLIGHTLY more reasonable market for existing homes, and any ray of sunshine is still a ray of sunshine.
It’s hard to be a real estate agent right now, folks.