OC Housing Report

Pricing is Crucial

Buyers now have the upper hand when negotiating in today’s market, which means sellers must painstakingly arrive at the asking price to be successful. 

To find success, sellers need to price their home according to its Fair Market Value based upon its location, condition, upgrades, amenities, age, décor, and overall appeal.

For nearly two years sellers got away with arbitrarily pricing a home where nearly everything sold instantly, with multiple offers, and closed sales prices way above their asking price. It was an auction-like atmosphere. There were throngs of buyers that viewed nearly everything that hit the market. Homes were listed FOR-SALE and, in some cases, buyers were only allowed to see a home during a three-hour window on a Saturday, and then all offers had to be submitted by the following Tuesday at 5 PM. After sifting through 10, 20, 30, or more offers, only one lucky buyer won. All the other buyers had to go back to the drawing board.

Pricing a home was so random, that many homeowners wanted even more than the price suggested by the real estate professional, leaving the professional scratching their head in disbelief that it would ever to sell. Often, after placing the home on the market, they were still able to procure multiple offers and ultimately sale above the asking price. The housing market was out of control and values surged higher. Not only did the record low mortgage rate accelerate demand, but the inventory also plunged throughout the pandemic. The mismatch between supply and demand paved the way to a historic rise in home values. 

Those days are gone. The Federal Reserve has slammed on the brakes and done everything in their power to “reset” the housing market, one of the main economic drivers of the economy. As a result, mortgage rates have skyrocketed from 3.25% at the start of the year to 7.12% today, according to Mortgage News Daily, more than doubling, another historic rise. Affordability has taken an overwhelming hit and demand is now down by 43% compared to last year. With muted demand, the active inventory has ballooned and is up by 79% year-over-year. Consequently, the Expected Market Time, the amount of time from hammering in the FOR-SALE sign to opening escrow, has grown from a record low of 19-days in mid-March, an insane pace, to 77 days today. The Expected Market Time had eased from 72 days in July to 61 days to start September due to rates receding during the month of August, but that has all changed since.

 

 

 

 

 

 

 

 

 

 

 

Excerpt taken from an article by Steven Thomas.

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 44 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 25 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.