Understanding How Homes Sell with Multiple Offers, Over Asking Price in a Buyers’ Market
Today it’s a buyers’ market? Right?
If a house is listed for $500,000, the seller’s desperate. Why not offer $480,000 or $450,000 or even $425,000 and really get a deal?
If it’s a buyer’s market, then they have to take your offer, don’t they? It’s probably been sitting on the market for months, and they’ll jump on any offer they get, right?
Why? Is it really a buyers’ market? A buyer’s market is defined as a market in which there are more than 6 months of inventory (to determine inventory, you divide the average number of house that sell each month by the number of houses currently on the market).
In many areas in Orange County, there is less than 6 months of inventory. In the South Coast Metro area of Costa Mesa, there is only 2.68 months of inventory currently available. Typically, this low inventory would be considered a sellers’ market but most would agree that it is not currently a sellers’ market.
If a home is desirable and/or well-priced, it is not unusual for that property to sell with multiple offers and over asking price. Does that sounds like a buyers’ market?
If inventory is low, homes are receiving multiple offers and selling for more than asking price, why do people consider it a buyers’ market? Consider the whole of the situation.
Prices are down 38% in Orange County from the median in mid 2007; prices continue to fall in many areas. If you turn on the news, you will hear of record number of foreclosures and huge increases in unemployment,
Many would say that this would cause a buyers’ market. However, consider the other side. There are many buyers who have been wanting to buy for the past several years but could not because of the prices. Now that prices have fallen along with interest, these buyers are able to buy the homes they’ve been eager to buy for the past several years.
When you are making an offer in today’s market, be certain to carefully consider the intricacies of today’s market before submitting that offer if it is truly a home that you want to own.